AARP: Prescription drug prices rose twice as fast as inflation last year

SEATTLE — Millions of Americans rely on prescription drugs to keep them healthy, but what happens when the price of the drugs they need are rising faster than the rate of general inflation?

"The more we look at these high prices and price increases the more likely it is that we're going to find people who are unable to afford the prescription drugs that they need," said Leigh Purvis, director of Health Care Costs and Access for AARP. "Or having to make choices between buying those prescription drugs and paying for other important things, like food or rent."

AARP's findings were part of it's most recent RX Price Watch report, which found that retail prices for 260 widely used brand-name prescription drugs increased 2.9 percent in 2020.

The price increase amounted to a rate that was more than two times the rate of inflation.

"What we found is that on average the price for one brand-name prescription drug would have been $3,700 lower if price increases had not exceeded inflation between 2006 and 2020," said Purvis, adding that although insurance often covers a fair amount of the costs, the expense comes back in the form of higher premiums and cost sharing. "You are paying for the full price of the prescription drug. It may not be at the pharmacy counter, but those costs are being paid."

The report also found that Americans are paying more for drugs.

"Researchers have consistently found that Americans are paying brand-name drug prices that are three-to-four times, if not more, higher than the prices that are paid in other countries," Purvis said.

The price tag on Biogen's newly-approved drug to treat Alzheimer's was a shock for many: The drug, named Aduhelm, comes with a yearly cost of $56,000.

"It speaks to a larger trend that I refer to as a race to the top," Purvis said. "Where it seems like drug companies are just constantly coming out with higher and higher prices."

Purvis said the price for the Alzheimer's drug treatment is nearly double the median annual income for a patient with Medicare.

"That obviously is not sustainable nor is it affordable," she said. "If a drug costs more than you make in a year, that is not something that you can afford in any way, shape or form."

To lower your prescription drug costs, Purvis advises patients to speak with their healthcare provider to determine if a less expensive alternative is available.

The rising cost of prescription drugs is not a one-fix situation, but there are a lot of options currently under consideration by federal lawmakers.

Members of Congress are currently discussing three different options, including:

• A plan to let Medicare negotiate on behalf of its beneficiaries, which is something it can't do now.
• A cap on out-of-pocket expenses under Medicare Part D, which pays for the drugs patients buy at the pharmacy.
• A proposal to penalize drug manufacturers that increase their prices faster than the rate of inflation.