Washington, DC — Retail prescription drug prices have increased six times faster than the general inflation rate of 1.5 percent, according to a new AARP Public Policy Institute report that analyzed price changes for 622 drugs between 2006 and 2013.
The average annual cost of prescription drugs that are widely used by seniors reached a high of just over $11,000, about three-quarters of the average annual Social Security retirement benefit of $15,526, nearly half the $23,500 median income for Medicare beneficiaries, and more than one-fifth of the median U.S. household income of $52,250 during the same period.
“If these trends continue, more and more Americans will simply be unable to afford the medications that they need to get and stay healthy,” said Debra Whitman, PhD, AARP’s Chief Public Policy Officer. “When the price of a drug goes up, someone has to pay the bill—and ultimately that someone is every taxpayer and consumer. As drug prices continue to escalate, so do our monthly premiums and our out-of-pocket costs at the pharmacy counter.”
The report, latest in the AARP’s RxPrice Watch series, examined the retail prices of 227 brand name, 115 specialty, and 280 generic prescription drugs most widely used by older Americans in 2013. The study found that the average annual increase was 9.4 percent, compared with a general inflation rate of 1.5 percent.
On average, brand name drugs increased annually by 12.9 percent, specialty drugs by 10.6 percent, and generic drugs by 4%, according to the report.
Specialty drugs for cancer, hepatitis C and rare diseases—many of them injected biologic drugs, which are produced inside cells rather than by mixing chemicals—drove the increase.
“Unfortunately, it’s becoming clear that we can no longer rely on decreases in generic drug prices to offset unrelenting price increases for brand name and specialty drugs,” said Leigh Purvis, MPA, AARP Public Policy Institute’s Director of Health Services Research and co-author of the new report. “This shift has serious implications for older adults and the entire health care system.”
The report found the average retail price among the prescription medicines tracked more than doubled from $5,571 in 2006 to an “incredible” $11,341 in 2013, Purvis said.
An August poll by the Kaiser Family Foundation found 24 percent of Americans were having trouble paying for their medicines. That rose to 43 percent for those in poor health.
The AARP Public Policy Institute, in collaboration with the University of Minnesota’s PRIME Institute, developed the list of prescription drugs for the study and obtained data from the Truven Health MarketScan Research Databases to analyze the retail price changes.
The institute’s Rx Watchdog report series has been tracking manufacturer price changes for widely used prescription drugs since 2004.
(Sources: AARP and reporting by Linda A. Johnson, Associated Press)