AARP research says brand-name drug prices far outpace inflation

April 15, 2010

AARP?s Public Policy Institute finds that average manufacturer price increases for brand-name and specialty prescription drugs widely used by Medicare beneficiaries continued to outstrip the price increases for other consumer goods and services.

AARP’s Public Policy Institute has found that average manufacturer price increases for brand-name and specialty prescription drugs widely used by Medicare beneficiaries continued to outstrip the price increases for other consumer goods and services in the 12 months ending with the third quarter of 2009.

The price of 219 brand-name prescriptions most widely used by Medicare beneficiaries increased by 9.3% in the period, according to the AARP. That was higher than the rate of increase observed during any of the prior seven years of the study, which ranged from 5.3% to 8.7%. In contrast, the rate of general inflation rate was -0.3% over the same period.

The AARP Public Policy Institute’s research indicates the average annual cost for one brand-name medication was about $2,045 in the 12 months ending with the third quarter of 2009.

The report also indicates 96% (210 of 219) of the brand-name drugs studied experienced a price increase. Nine (4%) of the 219 brand-name drug products had no change in price during the same period.

The price of the 187 generic prescriptions most widely used by Medicare beneficiaries decreased by an average of 8.7% in the 12 months ending with September 2009, according to the report.