If you use generic prescription drugs, you'll be happy to know that you paid nearly 8 percent less for them in 2009, according to a new report from AARP's Public Policy Institute.
Even better news: A new industry-funded report says the trend toward cheaper prescription generic drugs will continue through 2015.
That's a double-dose of good news for seniors approaching the Medicare drug coverage gap known as the dreaded doughnut hole. Up to 4.5 million seniors will fall into the Part D gap this year, according to the Centers for Medicare and Medicaid Services, with most reaching it during late July.
Generic drug prices have been steadily falling since 2004, when AARP first began tracking prescription drug prices. On average, retail prices for 164 generic drugs that have been on the market since the study began saw a 35 percent decrease over five years. During the same period, general inflation increased 13.3 percent.
Compare that to AARP's last drug price report in March, which found that prices for widely used brand name drugs increased by an average 8.3 percent in 2009.
AARP's findings on generic drugs were echoed in a report funded by the drug industry's trade association, the Pharmaceutical Research and Manufacturers of America, and co-authored by Ernst Berndt, an economist with the Massachusetts Institute of Technology and the National Bureau of Economic Research.
The report, by the IMS Institute for Healthcare Informatics, found that eight of the 10 most commonly prescribed drug classes covered by Medicare had fallen to an average daily cost of therapy of $1 in December 2010 from $1.50 in January 2006. Costs are expected to decline to 65 cents by the end of 2015.
The findings of both reports could temper recent Congressional concerns over the growing costs of Part D to the government, particularly as more and more aging Baby Boomers begin to enroll in the plan. With legislators threatening cuts to the program in the heat of debt ceiling talks, Berndt contends that the Medicare agency has repeatedly overestimated the cost of Part D drugs.
In any case, both reports point to continued savings for older Americans as brand-name patents expire and more drugs face generic competition.
Photo credit: LucarioF via flickr.com