Posted by: Melissa Pennuto
Retail prescription drug prices have increased six times faster than the general inflation rate of 1.5 percent, according to a new AARP Public Policy Institute (PPI) report out this month. The average annual cost of prescriptions reached new heights of more than $11,000 which comes out to about 75 percent of the average annual Social Security benefit. “If these trends continue, more and more Americans will simply be unable to afford the medications that they need to get and stay healthy,” said Debra Whitman, PhD, AARP’s Chief Public Policy Officer. “When the price of a drug goes up, someone has to pay the bill — and ultimately that someone is every taxpayer and consumer. As drug prices continue to escalate, so do our monthly premiums and our out-of-pocket costs at the pharmacy counter.” The newest PPI report, the latest in a series of reports on prescription drug prices, examined the retail prices of 622 brand name, specialty, and generic prescription drugs most widely used by older Americans in 2013.
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 2013. In 2013, retail prices for 622 brand name, generic, and specialty prescription drugs widely used by Medicare beneficiaries increased by an average of 9.4 percent. In contrast, the general inflation rate was 1.5 percent over the same period.
Increases in the retail price of specialty prescription drugs have a corresponding impact on the cost of drug therapy for the individual and for all other payers. In 2013, the average annual retail cost of prescription drug therapy for one drug, based on the market basket in this study, was over $11,000 per year. This average annual cost was almost three-quarters of the average Social Security retirement benefit ($15,526). It was also almost half of the median income for Medicare beneficiaries ($23,500) and more than one-fifth of the median US household income ($52,250) over the same time period.
The findings of this report are attributable entirely to drug price growth among brand name and specialty drugs, which more than offset often substantial price decreases among generic drugs. More importantly, the recent acceleration in overall prescription drug price growth could be an indication that we can no longer rely on lower-priced generics to counterbalance the price trends seen in the brand name and specialty prescription drug markets.
Our firm is dedicated to helping seniors and their loved ones work through issues and implement sound legal planning to address them. If we can help in any way, please don’t hesitate to contact our office at (630) 221-1755.
