Annual increases in manufacturer prices (a measure of price inflation for existing drugs) have been significantly lower in recent years than increases in average retail prescription prices (which include both inflation and the higher prices for newly launched drugs). This difference demonstrates the growing contribution of a more expensive drug mix to overall price increases.

Source: The Kaiser Family Foundation and the Sonderegger Research Center, Prescription Drug Trends, A Chartbook Update, November 2001, Exhibit 23, at http://www.kff.org/insurance/3161-index.cfm, updated by the Kaiser Family Foundation with retail prescription price data from the National Association of Chain Drug Stores website (www.nacds.org) and manufacturer price data from personal communication, IMS Health.