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Rx Price Watch Report: Brand Name Drug Prices Increase More than Twice as Fast as Inflation in 2018

by Leigh Purvis, and Dr. Stephen Schondelmeyer (PRIME Institute, University of Minnesota), Public Policy Institute

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The latest Rx Price Watch report by Leigh Purvis and Dr. Stephen W. Schondelmeyer finds that retail prices for widely used prescription drugs increased, on average, between 2006 and 2018. In 2018, retail prices for 267 brand name prescription drugs widely used by older adults increased by an average of 5.8 percent. In contrast, the general inflation rate was 2.4 percent over the same period.

Notably, the average annual cost of drug therapy for one brand name drug used on a chronic basis would have been more than $5,000 lower in 2018 ($2,176 v. $7,202) had their retail price changes been limited to the rate of general inflation between 2006 and 2018.

Spending increases driven by high and growing drug prices will affect all Americans in some way. Those with private health coverage will pay more in cost-sharing and higher premiums for their health care coverage. In addition, increased government spending will ultimately lead to higher taxes and/or cuts to public programs.

Policy makers interested in slowing brand name drug price increases should focus on changes that produce sustainable effects. While policy options should encourage meaningful pharmaceutical innovation, such options should be balanced with the need for improved health and the financial security of consumers and taxpayer-funded programs like Medicare and Medicaid.

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.

For more information, please contact the AARP Public Policy Institute at (202) 434-3890.

Suggested Citation:

Purvis, Leigh, and Stephen W. Schondelmeyer. Rx PriceWatch Reports. Washington, DC: AARP Public Policy Institute, June 2019 https://doi.org/10.26419/ppi.00073.000

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