The latest Rx Price Watch report by Leigh Purvis and Dr. Stephen Schondelmeyer finds that retail prices for widely used generic prescription drugs declined, on average, between 2006 and 2013. In 2013, retail prices for 280 generic prescription drugs widely used by Medicare beneficiaries fell by an average of 4.0 percent. In contrast, the general inflation rate was 1.5 percent over the same period.
The report shows that the retail prices of most of the generic drug products in the market basket are decreasing. Some of these decreases are substantial, reaching 30 percent or more. However, some generic drug products had equally substantial, or in some cases extraordinary, price increases. Further, the rate of generic price declines has been slowing for the past decade, indicating that the era of consistent generic drug price decreases may be coming to an end.
Understanding what is driving the recent retail price increases for some generic prescription drugs, as well as how these factors might be mitigated, will become more important as more brand name drugs and biologicals enter the market with extremely high prices.
These AARP Public Policy Institute reports are a continuation of our Rx Watchdog report series that has been tracking manufacturer price changes for widely used prescription drugs since 2004. The Rx Price Watch reports utilize retail prices - or the amount charged to consumers (and/or insurers) - as our primary data source. The reports are based on drugs widely used by older Americans.