Prescription Drug Prices Increased Twice the Inflation Rate of US Economy in 2020, AARP Report Finds
A new report from AARP shows that even as the COVID-19 pandemic drove Americans out of work, and cost millions of people their health coverage, prescription drug prices increased at twice the inflation rate of the U.S. economy in 2020.
In response to reporting from USA Today, Protect Our Care released the following statement:
“This report shines a bright light on what we already know to be true: the price of prescription drugs are out of control,” said Protect Our Care Communications Director Anne Shoup. “As drug companies are raking in record profits, seniors are facing impossible choices between affording medications and paying rent or putting food on the table. Lawmakers must put an end to Big Pharma’s greed and finally pass H.R. 3 to give Medicare the power to negotiate for lower drug prices. The time to act is now.”
Taylor Avery // June 8, 2021
In 2012, Lynn Scarfuto was diagnosed with chronic lymphocytic leukemia. After surgeries and rounds of chemotherapy, her oncologist prescribed the oral medication Imbruvica, a drug that costs more than $14,000 a month.
Scarfuto is on Medicare, but said she still wouldn’t be able to afford the drug without a grant from the Patient Access Network Foundation and New York State’s Elderly Pharmaceutical Insurance Coverage Program. The drug has seen an 82% price increase since its release in 2013, according to a May report from the U.S. House of Representatives’ Committee on Oversight and Reform.
Scarfuto is only one of many seniors across the United States struggling to pay for their prescriptions.
Brand-name prescription drugs widely used by seniors saw their slowest average annual price increase in 2020 since 2006. But the 2.9% increase is still twice the country's general inflation rate of 1.3%, according to a report from the AARP.
“We really are concerned that we're reaching a point where a lot of people aren't going to be able to afford the drugs that they need,” said Leigh Purvis, director of health care costs and access at AARP’s Public Policy Institute and the report's co-author.
The findings, published in the AARP Public Policy Institute’s Rx Price Watch Report, showed insurance-negotiated prices of 260 brand-name prescription drugs have increased, on average, faster than general inflation every year since 2006.
A single brand-name medication taken on a scheduled, repeating basis was more than $6,600 a month in 2020, according to the report, and older Americans take, on average, 4.7 prescription drugs every month.
If price increases hadn’t exceeded inflation, the same single drug would have cost $2,900, about $3,700 less.
“That is really significant to someone who's on a fixed income," Purvis said. "If you multiply that out by the number of drugs people are taking on average, you're looking at a $17,000 difference in terms of how much the drugs are costing."
If current trends continue, consumers can expect increasing out-of-pocket costs, including higher deductibles, premiums and cost sharing. Drug price increases also strain taxpayer-funded programs like Medicare, according to the report.
The consequences are real for people like Scarfuto.
“If medications are specific to a certain population of people, then what is the sense of charging $14,000?," said Scarfuto, a retired nurse. "Unless you're going to get paid $14,000, it might as well be $100,000. People cannot afford to make a choice between food or living and taking pills."