The average annual cost of therapy for one widely used brand-name prescription drug in 2017 was over 18 times higher than the cost of therapy for one generic drug, according to a new AARP Public Policy Institute (PPI) report released today. The cost for a generic medication used on a chronic basis averaged $365 per year. In contrast, the average annual cost for a brand-name prescription drug was $6,798.
“Generics account for nearly nine out of every 10 prescriptions filled in the U.S. but represent less than a quarter of the country’s drug spending,” said Debra Whitman, Executive Vice President and Chief Public Policy Officer at AARP. “These results highlight the importance of eliminating anticompetitive behavior by brand-name drug companies so that we get more lower-priced generic drugs on the market.”
AARP PPI’s latest Rx Price Watch Report “Trends in Retail Prices of Generic Prescription Drugs Widely Used by Older Americans” found that retail prices for 390 generic prescription drugs commonly used by older adults, including Medicare beneficiaries, decreased by an average of 9.3 percent in 2017, compared to the general inflation rate of 2.1 percent. The decline follows two consecutive years of substantial generic drug price decreases; the previous two consecutive years saw increases in generic drug prices.
- With older adults taking an average of 4.5 prescription drugs every month, those using generic prescription drugs were likely to have an average annual retail cost of $1,642 in 2017.
- All but three of the 390 generic prescription drugs analyzed in the report had a retail price change in 2017. While prices for 297 (76 percent) drug products decreased, 90 (23 percent) products had price increases.
- Six commonly used generic drug products had retail price increases of greater than 70 percent, including a nearly 200 percent increase for sertraline HCL, an antidepressant.
“The gap between average annual brand-name and generic drug prices has increased dramatically—brand name drug prices were six times higher than generic drug prices in 2013 but more than 18 times higher in 2017,” said Leigh Purvis, Director of Health Services Research, AARP Public Policy Institute, and co-author of the report. “As long as brand name drug prices continue to skyrocket, the value of prohibiting brand name drug company practices that slow or prevent competition from generic and biosimilar drugs cannot be overstated.
To view the full report, visit http://www.aarp.org/rxpricewatch.