updated 12/6/2004 7:34:27 PM ET 2004-12-07T00:34:27

Brand-name prescription drug prices edged up by half a percent in the third quarter, more slowly than earlier in 2004 or during the corresponding period last year, AARP said Monday.

The 0.5 percent rise still was faster than the general inflation rate for the July-September quarter.

AARP, the nation's largest organization of those over 50, offered no explanation for the slowdown in quarterly price hikes, although it did point out that the period coincided with the introduction of the Medicare drug discount card, when drug makers and insurers were eager to demonstrate its benefits.

"We don't know if that was a factor or if other things were going on," said AARP's David Gross, an author of the quarterly report that looks at prices for the 197 brand-name medicines most widely used by older Americans.

Prices jumped by 1.8 percent in the third quarter of 2003. The increase was 3.5 percent in the first three months of this year and 1 percent in the second quarter.

Those earlier increases helped fuel a 7.4 percent rise in brand-name prices for the 12 months ended in September, three times faster than inflation, AARP said.

"The annual rate of price increase is still historically high. It may be slowing to some extent, but 7.4 percent is much higher than we have seen," Gross said.

In the months leading up to the drug discount program, makers of best-selling medications raised prices quickly. AARP officials complained that the increases appeared to be designed to offset the coming discounts, although some drug companies said they typically raise prices early in the year.

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