Drug prices are currently twice the rate of inflation. Amazing and incredible! Just to give you an example, the average annual cost for widely used prescription drugs used to treat chronic conditions was $20,000 in 2017, according to a new AARP report. The report analyzed the retail prices of 754 brand-name, generic, and specialty medicines.
Moreover, a breakdown shows that retail prices for brand-name medicines retail prices increased an average of 8.4 percent. For commonly used specialty drugs, the increase was 7 percent. Specialty drugs are high-cost medicines used to treat serious illness, such as cancer. These increases offset the 9.3 percent decrease for generic medications in 2017.
Looking at the overall picture, the average annual increase in retail prices was 4.2 percent — twice the 2.1 percent general rate of inflation for 2017.
Drug Prices: Going Up, Up, Up
The price of prescription drugs is more than the average Social Security retirement benefit and is close to the income for a Medicare beneficiary.” said Leigh Purvis, AARP director of health services research. And, for some people, such as senior citizens, drug prices are close to what they make in a whole year. That’s what they earn in an entire year.
Unless Congress acts soon, older Americans will be unable to afford the drugs they need to stay healthy. This, in turn, will result in higher health costs.
Drug Prices: The Cost Driver
The high average annual drug price in 2017 was driven by the specialty drugs. For example, Humira, a popular drug for rheumatoid arthritis, cost $160 a day in 2017. Revlimid, a cancer drug, has an annual cost of nearly $250,000.
Right now, more and more people are using these drugs. For example, senior citizens are taking them for cancer and multiple sclerosis.
Current Bill Before Congress
Earlier this year, in January 2019, AARP launched its Stop Rx Greed campaign . It looks to persuade federal and state lawmakers to pass laws that would help lower prescription drug prices.
And, so far this year 24 states have passed 36 measures to lower medicine prices. These laws range from increasing the transparency of drug prices to measures allowing importation of drugs from Canada. Interestingly, the same drugs in Canada are a fraction of the price that we pay here in the United States. And these drugs are manufactured by the same drug companies! Go figure.
Currently, The House of Representatives has a measure in front of them that will allow importation of drugs as well as other things that can help reduce costs. A vote is planned right after the Holiday.