Jan 19, 2024

Rx Price Watch Analysis Finds Big Pharma Price Increases Outpaced Inflation Every Year Except One Between 2006 and 2020

A new report from AARP finds Big Pharma “consistently” increased prices above the rate of inflation between 2006 and 2020. In fact, the report found that Big Pharma increased prices on 943 blockbuster drugs widely used by patients faster than the rate of inflation “in all but one year between 2006 and 2020.”

AARP’s most recent Rx Price Watch report also had several other key takeaways, including:

  • In 2020, prices for the blockbuster drugs analyzed by AARP rose by 3.1 percent while the general rate of inflation was 1.3 percent.
  • In 2020, the average annual cost of the drugs AARP examined was more than $26,000 per year. This is “more than 40 percent higher than the average Social Security retirement benefit” and “nearly 90 percent of the median income for Medicare beneficiaries.”
  • For the prescription drugs AARP analyzed, the average annual cost of these drugs would have been $14,000 lower in 2020 had their price increases been limited to the general rate of inflation between 2006 and 2020.
  • 217 of the drugs AARP analyzed were on the market for the entire period from 2006 to 2020. For these drugs, the cumulative price increase over this time span was 279.5 percent, while the increase in general inflation over this period was 32 percent. This means these drugs increased almost nine times the rate of inflation over this period.

Big Pharma’s price hikes outpacing the rate of inflation also show no signs of slowing down.

In just the first two weeks of January 2024, Big Pharma already “raised list prices on 775 brand-name drugs… by a median of 4.5 percent,” according to an analysis from The Wall Street Journal and 46brooklyn Research. “The median increase is higher than the rate of inflation, which ticked up to 3.4 percent in December.”

In December, the Biden Administration announced that Big Pharma increased prices faster than the rate of inflation on 48 Medicare Part B drugs in the last quarter of 2023. A fact sheet released by the White House noted more than 750,000 American seniors rely on the prescription drugs, covered by Medicare Part B, that Big Pharma hit with price hikes outpacing inflation in the quarter.

Read the full Rx Price Watch report from AARP HERE.

Read more about Big Pharma’s price increases that outpace inflation HERE and HERE.

And learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.