Brand-name prescription drug prices have jumped nearly 10 percent in the past 12 months—the biggest spike in eight years, according to a new AARP report.
The AARP Rx Watchdog report released this week found that the cost of prescription drugs most commonly used by those in Medicare rose 9.7 percent over the 12-month period ending in March. The Alzheimer’s drug Aricept rose by nearly 14 percent, while the heart disease medication Plavix saw a 10.5 percent jump. Expensive specialty drugs, such as biologics or injectable drugs, saw a hike of 9.2 percent, the report found. The inflation rate remained virtually flat during the same period.
Despite the price increase for brand names, the cost of generic drugs declined by an average of 9.7 percent. The study found that the average yearly costs for a person taking three generic medications dropped by $51, compared with a $706 increase for people taking three comparable brand-name prescriptions.
A spokesman for the drug industry, however, challenged the accuracy of the AARP study. “The report is misleading because it is based on incomplete information,” Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, an industry association, said in a prepared statement. “The report’s conclusions ignore the reality that prescription medicines represent a small and decreasing share of growth in overall health care costs in the United States.”
In 2011, drug manufacturers will have to pay 50 percent of the cost of brand-name drugs for people who hit the Medicare drug plan “doughnut hole.” “The latest price increases threaten to offset the promised savings for seniors if the increases continue on this path for years to come,” said John Rother, AARP’s executive vice president of policy and strategy.
The AARP report follows a similar study by Express Script, a company that handles prescription drug claims. Express Script found that brand-name drug prices rose by 9.1 percent in 2009, up from 7.4 percent the previous year, while special drug costs rose 11.5 percent, from 9.4 percent. “The lifesaving drugs Americans need are out of reach for many because of unjustifiable price hikes,” Rother said. He urged consumers to seek generic alternatives to pricey brand-name drugs.
“We encourage consumers to talk to their doctor about safe, affordable alternatives that could save thousands of dollars each year,” he said.
Tauren Dyson is an intern with the AARP Bulletin.