FOR IMMEDIATE RELEASE
March 6, 2012
AARP Media Relations
New AARP PPI Report Finds Price Increases for Brand Name and Specialty Drugs More Than Offset Generic Drug Price Decreases
Annual cost of drug therapy increased by more than $1,000 from 2005-2009
WASHINGTON— A look at retail prices for a combined set of widely used prescription drugs finds the cumulative change in prices from 2005 through 2009 was almost double the rate of inflation. AARP Public Policy Institute’s (PPI) examination of widely used drugs – brand name, specialty and generic – found that even with substantial decreases in the prices of generic drugs, the average annual cost of drug therapy continued to rise.
“For the people who rely on these drugs, such relentless price increases have serious implications,” said Cheryl Matheis, AARP Senior Vice President for Policy Strategy. “Despite price reductions for generics, it’s evident that the considerable increases in brand name and specialty drug prices are still leaving Americans with overall costs that are growing far faster than the rate of inflation.”
The latest PPI Rx Price Watch Report examined retail prices for the 514 prescription drugs most used by Medicare beneficiaries. In 2009, the annual average rate of increase for these drugs was 4.8 percent while rate of general inflation was -0.3 percent. When broken down further, the findings show that the retail prices for brand name and specialty drug products rose by 8.3 and 8.9 percent respectively in 2009. In contrast, retail prices for generic drugs decreased by 7.8 percent.
According to the report, retail prices for the 469 prescription drug products that have been on the market since the end of 2004 have increased by 25.6 percent from 2005 through 2009, compared with a general inflation rate of 13.3 percent. For consumers taking a drug on a chronic basis, their average annual cost of therapy rose from $2,160 to $3,168 over the same time period.
AARP is working with Congress to help lower prescription drug costs by creating more competition in the marketplace. The Association has called on lawmakers to allow for the safe and legal importation of prescription drugs from abroad, improve the pathway for the approval of generic biologic drugs and allow Medicare to negotiate prescription drug prices directly with drug makers.
The list of prescription drugs analyzed in the PPI Rx Price Watch report is based on the drug products most widely prescribed to people in Medicare Part D. Price changes are measured using retail prices as reported by the Thomson Reuters MarketScan® Research Databases.
The full PPI Rx Price Watch report is available at http://www.aarp.org/rxpricewatch.
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