The AARP Public Policy Institute released a report today showing that 2015 was the 4th straight year of double-digit average annual increases for widely used brand name drugs. The nonprofit organization also concluded that prices for brand name drugs increased almost 130 times faster than the 0.1% general inflation rate in 2015.
The report, which considered retail prices of 268 brand name prescription drugs used by older Americans between 2006 and 2015, found that the average cost for a single brand name drug for a chronic condition is nearly $6,000. Since the average older American takes 4.5 prescription drugs each month, the AARP’s report calculated the average annual cost of treatment is $26,000. The report’s authors pointed out that this is almost $2,000 more than the median income for Medicare beneficiaries.
Out of the 6 drugs with the highest price increases over the study period, 5 of them were marketed by Valeant Pharmaceuticals (NYSE:VRX). Valeant’s anti-anxiety drug, Ativan, increased in price by 2,873% between 2006 and last year. Most of the brand name prescription drugs that the report considered saw retail price increases in the past decade.
“This new report once again highlights the high and unrelenting price increases that are shockingly common in the pharmaceutical market,” AARP chief public policy officer Debra Whitman said in prepared remarks. “What’s particularly remarkable is that these incredibly high price increases are still occurring in the face of the intense public and congressional criticism of prescription drug pricing practices.”
“Prescription drug therapy is not affordable when its cost exceeds the patient’s entire income,” co-author Leigh Purvis added. “Even if patients are fortunate enough to have good health care coverage, high prescription drug costs translate into higher out-of-pocket costs—especially for those who pay a percentage of drug costs rather than a fixed copayment—as well as higher premiums, deductibles, and other forms of cost-sharing.”