The latest Rx Price Watch report by Leigh Purvis and Dr. Stephen Schondelmeyer finds that retail prices for widely used brand name prescription drugs increased faster than general inflation between 2006 and 2013, and that the difference between the rate of brand name drug price increases and the rate of general inflation has been widening. In 2013, retail prices for 227 brand name prescription drugs widely used by older Americans increased by an average of 12.9 percent. In contrast, the general inflation rate was 1.5 percent over the same period.
Brand name drug price increases translate into higher out-of-pocket costs, especially for consumers who pay a percentage of drug costs (coinsurance) rather than a fixed dollar amount (copayment). Higher prices are usually passed along to consumers in the form of increased premiums, higher deductibles, and other forms of cost sharing.
Prescription drug price increases also affect taxpayer-funded programs like Medicare and Medicaid. Higher government spending driven by large price increases eventually affects all Americans in the form of higher taxes, cuts to public programs, or both.
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.
For more information, please contact the AARP Public Policy Institute at (202) 434-3890.