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AARP Applauds Senate Aging Committee for Working to Lower Prescription Drug Prices

Common sense solutions can save billions without cutting benefits for seniors

July 21, 2011

Media Relations

AARP Applauds Senate Aging Committee for Working to Lower Prescription Drug Prices
Common sense solutions can save billions without cutting benefits for seniors

WASHINGTON—AARP today applauded the Senate Aging Committee for holding a hearing on reducing drug costs in Medicare. The Association submitted a statement urging lawmakers to support policies that could reduce prescription drug costs in Medicare and throughout the health care system, rather than cutting benefits and raising costs for seniors as some recent deficit reduction proposals suggest. Earlier today, AARP’s Public Policy Institute released a report finding that generic drug prices dropped 7.8 percent in 2009—the fifth consecutive annual drop. Excerpts from AARP’s statement to the committee follow:

“On behalf of our members and all older Americans, we thank you for holding this important hearing on reducing drug costs to Medicare. Older Americans use prescription drugs more than any other segment of the U.S. population, and, unfortunately many older Americans—particularly Medicare beneficiaries—continue to struggle to afford their prescription medications.”

“According to a recent AARP study, the average annual increase in retail prices for 217 brand name prescription drugs widely used by Medicare beneficiaries was 8.3 percent in 2009. In contrast, the retail prices for 185 generic prescription drugs widely used by Medicare beneficiaries fell by an average of 7.8 percent.”

“AARP has long-advocated for changes to the Medicare program that will help beneficiaries and improve the overall program. We urge Congress to consider enacting legislation that will improve the program before it considers policies that would harm the Medicare program or ask older Americans to pay more for their care.”

Prescription Drug Rebates: “AARP supports The Medicare Drug Savings Act (S. 1206) introduced by Senator Rockefeller and others that would require prescription drug manufacturers to provide rebates for drugs provided to Medicare Part D low-income subsidy (LIS) beneficiaries, including those who are dually eligible for Medicare and Medicaid. Prior to the enactment of the Medicare Modernization Act (“MMA”), dual eligibles received their prescription drugs through the Medicaid program, and thus, their drugs were subject to these rebates.”

Generic Biologic Drugs: “AARP supports reducing the exclusivity period for biologic drugs. Biologic drugs hold the promise of treating some of the most serious diseases—such as multiple sclerosis, arthritis, cancer and others—that often affect older populations. Currently, biologics represent about one third of the total drugs in development, with the number expected to rise considerably in coming years.

“…[T]he period of exclusivity granted to biologic manufacturers is currently twelve years. AARP and many others, including the Federal Trade Commission, have long stated that this period of exclusivity is excessive and serves to over-compensate brand-name pharmaceutical companies while keeping much-need biosimilar drugs from coming to market. As more research and development is conducted in the biologic marketplace, improving upon the pathway is vital.”

Pay-for-Delay Agreements: “AARP supports legislation that will help to bring lower cost generic drugs to market sooner by preventing abuses in patent settlements between generic and brand prescription drug companies (so called “reverse payments” or “pay-for-delay agreements”)… The Federal Trade Commission has projected that prohibiting pay-for-delay agreements would save consumers $3.5 billion a year and also reap significant savings for the federal government.”

Secretarial Negotiation: “AARP supports legislation that builds upon the strong foundation of the Medicare prescription drug law by enabling the Secretary of HHS to use the bargaining power of Medicare’s 47 million beneficiaries to negotiate for lower prescription drug prices. More must be done to strengthen Medicare Part D Plans’ ability to secure the lowest price for beneficiaries and the Medicare program.”

Safe Drug Importation: “AARP supports the Pharmaceutical Market Access and Drug Safety Act, sponsored by Senators Stabenow and Snowe (S. 319), which would establish a framework for the safe, legal importation of lower-priced prescription drugs from abroad. AARP believes that a system providing for the safe and legal importation of prescription drugs can serve to put downward pressure on drug prices and will permit consumers to realize some savings on the cost of their prescription drugs. … [T]he Congressional Budget Office estimated that similar legislation introduced last Congress would save $19.4 billion for federal taxpayers.”

AARP’s Rx Price Watch reports are available online at For a complete copy of AARP’s statement to the Senate Aging Committee, please contact AARP Media Relations at

AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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