No Relief from High Drug Costs in Sight
Prescription drug list prices outpaced the rate of inflation every year from 2006 to 2015.
A new report from the AARP’s Public Policy Institute suggests that prescription drug costs continue to increase at a significantly higher rate than the rate of inflation, according to a press release. This significant uptick in drug costs may threaten access to treatment, especially among patients taking multiple medications.
In the study, the researchers analyzed the list prices for 768 common prescription drugs, including 268 brand-name drugs, 399 generic drugs, and 101 specialty drugs. The drugs included were approved to treat diabetes, high blood pressure, high cholesterol, pain, cancer, and mental health conditions, according to the AARP.
The authors discovered that the list price for 768 drugs commonly used by seniors increased by 6.4% in 2015. Additionally, the average price for 528 medications for chronic diseases was $12,951 in 2015, which is 3 times what the cost was in 2006, according to the AARP.
Although a majority of Americans do not pay the list price, a large number of individuals have a prescription drug plan that requires them to pay a percentage of the cost rather than a standard co-payment.
“Patients subject to this type of cost sharing feel the impact of drug-price increases directly,” said Leigh Purvis, director of Health Services Research at PPI. “And even if you don’t have to pay coinsurance, higher retail prices will eventually lead to higher copays, premiums or deductibles, as well as higher taxes or cuts to public programs.”
Notably, the authors reported that list price increases have surpassed the rate of inflation each year from 2006 to 2015, according to the release.
In 2015, the researchers found that there was a 15.5% boom in list price costs for branded drugs and a 9.6% increase for specialty drugs, while generic drug costs dropped nearly 20%, the AARP reported.
The authors said that these findings could indicate that Americans may not be able to rely on lower cost generic drugs to offset the rising cost of branded and specialty drugs.
“If these trends continue, older Americans, particularly those on fixed incomes, could find it increasingly difficult to afford the prescription drugs they need to get and stay healthy,” Purvis said.
The authors caution that these price increases will affect all Americans, regardless of their age or whether they take prescription drugs because it can lead to high premiums and out-of-pocket costs for privately-insured individuals, according to the release.
Additionally, high drugs costs paid by public insurance could also drive up taxes that fund the programs.
“Your taxes are also paying for prescription drugs through programs like Medicare and Medicaid,” Purvis said. “Over time, increased government spending on prescription drugs could lead to higher taxes and/or cuts to public programs.”