The price increase for brand name and specialty drugs more than offset the decreased price of generic drugs from 2005 to 2009.
Despite the fact that generic drug prices decreased from 2005 to 2009, the average cost of drugs rose because of the price increases for brand name drugs, according to AARP Public Policy Institute’s Rx Price Watch Report.
“For the people who rely on these drugs, such relentless price increases have serious implications,” said Cheryl Matheis, AARP Senior Vice President for Policy Strategy. “Despite price reductions for generics, it’s evident that the considerable increases in brand name and specialty drug prices are still leaving Americans with overall costs that are growing far faster than the rate of inflation.”
The report separated the drugs into three baskets: brand, specialty and generic. While the price of generic drugs decreased by 7.8% in 2009, brand drugs increased 8.3% and specialty by 8.9%.
For consumers using a prescription drug for a chronic condition the average annual cost was $3,168 per year for each prescription drug. In 2005 the average annual cost for drug therapy was $2,160 — a 46.6% increase to 2009.
Of the drugs looked at, 469 were on the market at the beginning of the study. The price for those drugs has increased by 25.6% from 2005 to 2009. During that time the inflation rate was 13.3%.
The change in prices was almost double the rate of inflation, which is consistent with findings since 2004. The report looked at retail prices for 514 prescriptions drugs used the most by Medicare beneficiaries.