A new study by the American Association of Retired People (AARP) reveals that drug makers increased wholesale prices for the most commonly prescribed brand-name medicines for elderly by 7.4 percent last year, about two-and-a-half times the inflation rate.

The AARP Public Policy Institute’s latest Rx Watchdog Report tracks the prices that manufacturers charge wholesalers for 220 brand-name prescription drugs commonly used by people enrolled in Medicare Part D, which is Medicare’s drug plan.

The report shows a 7.4% rise in the price that manufacturers charge to wholesalers for those drugs. That's a steeper increase than the 7.1% rise reported by the AARP for 2006.

“Unfortunately, many manufactures have taken the absence of an outcry as a green light to go ahead and raise prices even more. When pharmaceutical companies raise wholesale prices, consumers are ultimately struck with the bill,” John Rother, AARP public policy director said in a news release according to WebMD.

Among the top 25 prescription drug products, the sleep aid Ambien, made by Sanofi-Aventis, had the largest price increase at 27.7 percent. The price of Merck’s cholesterol drug Zocor did not change in 2007, and the price of Bristol-Myers Squibb’s blood thinner Plavix rose 0.5 percent.

The trade group representing drug makers, the Pharmaceutical Research and Manufacturers of America takes a different view, saying AARP’s numbers reflect neither the true amounts consumers pay for medicine nor a slowing in the growth of drug prices when taking into account generics.

“AARP’s numbers simply do not reflect the true amounts that seniors pay for their medicines. And they do not reflect the clear downward trend in prescription drug price growth,” Ken Johnson, senior vice president for the Pharmaceutical Research and Manufacturers of America (PhRMA), said in a news release.

One thing is for sure, the cost of drugs will continue to increase as long as drug makers can continue finding buyers for them.