The AARP Public Policy Institute has released a new Rx Price Watch report showing that, last year, the retail prices of 267 brand-name drugs that are commonly used by older Americans rose by an average of 5.8%—more than twice the general rate of inflation, which was 2.4%.
The AARP Public Policy Institute (PPI) has released a new Rx Price Watch report showing that, last year, the retail prices of 267 brand-name drugs that are commonly used by older Americans rose by an average of 5.8%—more than twice the general rate of inflation, which was 2.4%.
That increase in prices means that that the average yearly cost of therapy for one brand-name product rose to more than $7200 last year, an increase of $1900 from 2006 prices. For older Americans, who take an average of 4.5 prescription therapies on a chronic basis, annual drug costs totaled more than $32,000 in 2018, a number almost one-fourth more than the median annual income for Medicare beneficiaries.
“To put this into perspective: If gasoline prices had grown at the same rate as these widely-used brand-name drugs over the past 12 years, gas would cost $8.34 per gallon at the pump today,” said Debra Whitman, MA, PhD, executive vice president and chief public policy officer of AARP, in a statement. “Imagine how outraged Americans would be if they were forced to pay those kinds of prices.”
The report, authored by Leigh Purvis, MPA, director of health services research for AARP’s PPI, and Stephen W. Schondelmeyer, PharmD, Phd, of the PRIME Institute at the University of Minnesota, notes that, if retail price changes were limited to general inflation, average annual costs for brand-name drugs would have been more than $5000 lower last year.
“Americans will remain at the mercy of drug manufacturers’ pricing behavior until Congress takes major legislative action,” said Purvis in a statement.
This latest iteration of the AARP report follows closely on the heels of the PPI’s recent assessment of 2017 drug price increases. In that report, the organization found that retail prices for widely used prescription drugs increased by an average of 4.2%, while the general inflation rate was 2.1%.
In 2017, the average annual retail cost for 754 brand name, generic, and specialty prescription drugs that treat common conditions was approximately $20,000 per year, or nearly 20% higher than the average Social Security retirement benefit. The annual drug cost was also more than three-fourths of the median income for Medicare beneficiaries and almost one-third of the median US household income, said the report.
“If these trends continue, older Americans will be unable to afford the prescription drugs that they need, leading to poorer health outcomes and higher health care costs in the future,” said Purvis and Schondelmeyer.