It’s well known that prescription drug prices are skyrocketing in America. Price increases for brand name drugs have far exceeded the rate of inflation since at least 2006, according to AARP’s Rx Price Watch report. And the average annual cost for just one brand name drug taken on a chronic basis was about $6,800 in 2017, almost $1,000 more than in 2015. However, it’s not just patients paying for greedy Big Pharma practices that keep drug prices high— it’s also taxpayers.
As part of AARP’s Stop Rx Greed campaign to help lower drug prices, the AARP Public Policy Institute (PPI) released a new analysis showing that Medicare (meaning beneficiaries and taxpayers) spent an extra $110 billion in recent years just on drug price increases that exceeded general inflation. That is an enormous amount of unnecessary spending.
So what exactly is $110 billion worth in America? A whole lot of gas and groceries, as illustrated in a new AARP interactive infographic. We ran the numbers, which show that $110 billion in America could:
- rent for 9 million American families for a year.
- Pay a year of college for 9 million American students.
- Buy groceries for 25 million American families for a year.
- Buy gasoline for 56 million American families for a year.
Let that sink in for a moment.
Prescription drug spending is one of the fastest-growing components of Medicare. One possible solution would be to let Medicare use its enormous buying power to negotiate for lower prices, since Medicare is currently prohibited by law from negotiating with drug companies. Another idea: penalize drug companies that increase their prices faster than the rate of inflation. Both are commonsense solutions, pending in various bills before Congress. But until Congress and the Administration enact legislation that takes meaningful action to lower prescription drug prices, medications will continue to be unaffordable for older Americans and their families.
AARP fights to lower drug prices for not only seniors but for all Americans. We support policies that will lead to meaningful, substantive reform—and have worked not just in Congress, but with states across the country to enact legislation. So far this year, 25 states have enacted 37 laws that attack the root cause of the problem: the high prices set by pharmaceutical companies. In addition, AARP is actively working with members of Congress to advance bipartisan federal legislation that could help get lower- priced generic drugs to market more quickly, increase transparency, limit price increases to the rate of inflation, and cap out-of-pocket costs for Medicare beneficiaries.
AARP will not stop fighting until everyone can afford the medications they need.
To learn more about AARP’s efforts to Stop Rx Greed, visit www.aarp.org/rx.