WASHINGTON, D.C. — A new report from AARP shows the top 25 brand-name Medicare Part D drugs have tripled in price since they entered the market. The top 25 drugs have been on the market for an average of 14 years, some as recently as five years ago, some as many as 23 years ago.
AARP, in their analysis, claimed that the Inflation Reduction Act, signed by the Biden administration just over a year ago, will keep drug prices from exceeding the rate of inflation. They also stated that the cost increases have forced American families to consider “trade offs,” like paying for the drugs over meals or gas in their car.
“One provision will require drug companies to pay a rebate to Medicare if their prices increase faster than the rate of general inflation,” AARP stated in their report. “The Congressional Budget Office has estimated that these inflation-based rebates will reduce enrollee and Medicare Part D program spending by billions of dollars and will lead to lower drug prices in the commercial insurance market.”
Leigh Purvis, with the AARP Public Policy Institute, said in a Zoom press conference that drug companies should not be raising the prices of these drugs given how consumers are having to take cost-saving measures into their own hands like utilizing “coinsurance instead of a flat co-pay.”
“In fact, more and more people across the country are facing cost sharing as directly affected by drug pricing increases,” Purvis said. “Millions of other people don’t have coverage and are having to absorb the cost associated with high and growing drug prices on their own. There is no justification for these drug companies to engage in these types of price increases every year.”
However, even after the Inflation Reduction Act seemingly put caps on price increases for drug companies, some prices are still increasing.
“The question for the drug companies is going to be balancing whether it’s worth paying the penalty in order to increase prices across the board, and that is something that remains to be seen,” Purvis said in the press conference. “However, the fact that the CBO [Congressional Budget Office] has scored savings is a pretty strong indicator that this is going to be a way to discourage them from taking these types of price increases in the future.”
AARP also noted that if the government continues to spend at its current rate, Americans will suffer down the road.
“Higher government spending driven by drug price increases will affect all Americans in the form of higher taxes, cuts to public programs, or both,” the report said. “Equally important, increased drug costs—if left unchecked—will prompt more older Americans to stop taking necessary medications, thus leading to poorer health outcomes and higher health care costs in the future.”