WASHINGTON — A recent AARP Public Policy Institute report has revealed that the list prices for the top 25 brand-name drugs, which had the highest total spending in Medicare Part D in 2021, have soared by an average of 226% since their market introduction.
The staggering data showcases, for instance, the price of Enbrel, a medication for rheumatoid and psoriatic arthritis, which has risen by 701% since its debut in 1998. Similarly, Januvia, a drug used to treat diabetes, has experienced a 275% surge since it first became available in 2006. These increments, which range from 20% to an immense 739%, surpass the annual inflation rate during their respective time on the market, with just one exception.
These drugs amounted to a hefty $80.9 billion of total Medicare Part D expenditure in 2021, constituting approximately 37%. Additionally, they were prescribed to over 10 million Part D members. Intriguingly, the report found that almost 60% of the present list price for these top 25 drugs stems from price hikes following their initial market launch.
Leigh Purvis, Prescription Drug Policy Principal at AARP Public Policy Institute and the primary author behind this report, stated, “Brand-name drug prices have consistently risen much faster than inflation for years.” She elaborated, “Currently, the median price for a fresh brand-name prescription medication is around $200,000 annually. Hence, even minimal percentage growths can lead to price jumps in the thousands, rendering vital drugs inaccessible to those in need.”
In a pivotal move, Congress endorsed the Inflation Reduction Act. This mandates pharmaceutical firms to compensate Medicare with a penalty if their medication’s price inflates quicker than general inflation. Furthermore, for the first time, Medicare will now have the leverage to discuss and potentially diminish drug prices with these pharmaceutical giants. By September 1, the Centers for Medicare & Medicaid Services anticipates unveiling the initial 10 drugs lined up for negotiations. The prices decided upon will be implemented in 2026.
Commenting on this groundbreaking legislation, Nancy LeaMond, AARP Executive Vice President and Chief Advocacy and Engagement Officer remarked, “This monumental law holds major drug corporations accountable, offering genuine respite to numerous seniors grappling with spiraling prescription medication costs.” She continued, “U.S. households simply cannot sustain paying globally unmatched prices for their essential medications.”
As the 2024 elections loom, a telling AARP survey indicates that 67% of probable voters aged 50 or above consider the pricing of prescription drugs as a paramount issue. The poll suggests that candidates, regardless of party allegiance, might secure votes by endorsing policies that decrease medication costs.
Methodology Note: AARP Public Policy Institute’s findings rely on analyzing 2021 data sourced from the Centers for Medicare & Medicaid Services, the Medicare Part D Spending by Drug Dashboard, and the Medi-Span Price Rx Pro. The price changes of drug lists were set against the corresponding general inflation rate during the tenure each of the top 25 brand-name medications has been available for purchase.