Trends in retail prices of brand name prescription drugs widely used by older Americans: 2006 to 2020
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Rx price watch
- Author(s):
- Schondelmeyer, Stephen W., author Purvis, Leigh, author
- Contributor(s):
- AARP (Organization), issuing body. Public Policy Institute (AARP (Organization)), issuing body.
- Publication:
- Washington, DC : AARP Public Policy Institute, June 2021
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Economics, Pharmaceutical -- trends Prescription Drugs -- economics Prescription Drugs -- statistics & numerical data United States
- Genre(s):
- Technical Report
- Abstract:
- (1) Between 2019 and 2020, retail prices for 260 widely used brand name prescription drugs increased by 2.9 percent, more than two times faster than general inflation (1.3 percent). Despite being more than twice as high as inflation, this was the slowest average annual price increase for widely used brand name prescription drugs since at least 2006. (2) The average annual price increase for brand name prescription drugs widely used by older Americans has consistently slowed since 2014, which saw a double-digit percentage increase. (3) The average annual cost for one brand name medication used on a chronic basis was over $6,600 in 2020, more than $1,500 higher than the average annual cost of therapy in 2015. For the average older American taking 4.7 prescription drugs per month, the annual cost of therapy would have been more than $31,000 for 2020--more than three and a half times the cost seen 15 years earlier. (4) The average annual cost for one brand name medication used on a chronic basis would have been $2,911 in 2020--almost $3,700 lower--if the retail price changes for these products had been limited to general inflation between 2006 and 2020. For the average older American taking 4.7 prescription drugs per month, if drug prices had increased at the rate of general inflation, the annual cost of therapy that would have been more than $17,000 less than the actual annual cost of therapy experienced in 2020 ($13,682 v. $31,037). (5) Between January 2006 and December 2020, retail prices for 65 chronic-use brand name drugs that had been on the market since the beginning of the study period increased cumulatively by an average of 276.8 percent. The cumulative general inflation rate in the US economy was 32.0 percent during the same 15-year period. (6) Retail prices increased in 2020 for 76 percent (198 of 260) of the widely used brand name prescription drug products in the study's market basket. Ninety-two percent (183 of 198) of these price increases were greater than the rate of general inflation in 2020. (7) More than one-half (133 of 260) of the brand name drug products had a retail price increase of between 2.6 percent and 5.0 percent in 2020. None of the brand name drug products had a retail price increase in 2020 that exceeded 10 percent. This finding represents a change from prior years, when many manufacturers increased the prices of their products by 10 percent or more. (8) Retail prices increased faster than the rate of general inflation (1.3 percent) in 2020 for 20 of the 27 drug manufacturers with at least two brand name drug products in the study's market basket. Fifteen of the drug manufacturers--including the "All Others" category--had a weighted average annual brand name drug price increase at the retail level of 2.6 percent or more in 2020, which is more than twice the rate of general inflation (1.3 percent). (9) All but 3 of the 18 therapeutic classes of brand name drug products had average annual retail price increases that met or exceeded the rate of general inflation (1.3 percent) in 2020.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (ii, 22 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918317783106676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918317783106676