AARP Report Finds Pharmaceutical Companies’ Price Increases Outpacing Inflation Have More Than Doubled Costs on Specialty Medicines
In case you missed it, AARP’s latest Rx Price Watch report analyses the impact of Big Pharma’s price hikes that exceed the rate of inflation on specialty medicines – a growing category of drugs that are used to treat common, chronic conditions, especially in older patients.
AARP’s Rx Price Watch report finds that Big Pharma’s price hikes have “consistently exceeded” the general rate of inflation since 2006 and that between 2019 and 2020 this rate of increase was almost three-and-a-half times greater than inflation. According to the report, in 2020, Big Pharma hiked prices on 180 selected specialty medications by an average rate of 4.8 percent, while the rate of inflation during that same period was only 1.3 percent.
This has driven costs for specialty medications to unaffordable levels. As the report states, “In 2020, the average annual cost of therapy for a single specialty prescription drug, based on the market basket used in this study, was $84,442 per year. This average annual cost was: almost $20,000 higher than the median US household income ($65,712); nearly three times the median income for Medicare beneficiaries ($29,650); more than four-and-a-half times higher than the average Social Security retirement benefit ($18,530).”
If Big Pharma kept their price increases to the rate of inflation between 2006 and 2020, the average annual cost for one specialty medication would have been $39,068 in 2020, less than half the estimated current cost.
The report builds the case that brand name drug makers are targeting price hikes on specialty medications, because they are “increasingly being used to treat common chronic conditions that affect millions of Americans,” and also “represent a growing share of new drug approvals and the late-stage research and development pipeline.”
Big Pharma’s price hikes are contributing to a crisis of affordability, as Americans across the country continue to be unable to afford prescription drugs they need. Congress must act to hold Big Pharma accountable and lower prescription drug prices.
Read AARP’s latest Rx Price Watch Report HERE.
Read more on market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.