Rx Costs Outpaced NYers’ Income by 55%; Big Pharma Spent More on Stock Buybacks & Dividends than R&D: New Data

GettyImages

AARP: Congress Should Allow Medicare to Negotiate Lower Drug Prices

ALBANY, N.Y. – The cost of prescription drug treatment grew 55% faster than the average New Yorker’s income from 2015 to 2019, while Big Pharma spent more on stock buybacks and dividends than on research and development from 2008 to 2018, three new AARP fact sheets show.

AARPNY PricevsIncome

While New York residents’ income rose by 16.9% on average from 2015 to 2019, the average annual cost of prescription drug treatment jumped by 26.3%, the fact sheets show.

The pharmaceutical industry spent nearly $6.6 billion on advertising and over $161 million on lobbying in 2020.

The federal government continues to play an outsized role in prescription drug R&D. In fact, most of the important new drugs introduced over the past 60 years were developed with the aid of research conducted in the public sector.

Impacts of High Rx Prices to NY Residents

Meanwhile, AARP’s most recent Rx Price Watch Report found that the prices of 260 widely used brand-name medications rose more than twice as fast as general inflation in 2020 - in the middle of a global pandemic and financial downturn.

Americans pay more than three times what people in other countries pay for the same medicines. Too many consumers have to choose between filling life-saving prescriptions and paying rent, buying food and other critical essentials.

Prices can add up, as the average older American takes four to five prescription drugs per month, typically on a chronic basis.

“Congress should put a stop to these spiraling price increases, starting by finally giving Medicare authority to negotiate with pharmaceutical companies for lower prices,” said AARP New York State Director Beth Finkel. “The Veterans Administration does so, paying roughly half  

as much for brand name prescription drugs than Medicare Part D. Big Pharma spent more on stock buybacks and dividends than on research and development for a decade; the notion that drug makers need to charge Americans three times what residents in other countries pay for the same drugs to support innovation simply doesn’t hold water.”

Medicare Part D spent more than $180 billion on prescription drugs in 2019. Giving the program the power to negotiate would help reduce taxpayer spending and save Medicare Part D beneficiaries $117 billion over the next 10 years.

National Rx Facts

An AARP survey shows that 87% of registered voters 50 plus support allowing Medicare to negotiate with drug companies. Right now, the program is largely stuck paying whatever price pharmaceutical companies demand – leaving the government on the hook for sky-high costs that increase every year,




Contact: Erik Kriss, ekriss@aarp.org

Follow us on Twitter:  @AARPNY and Facebook: AARP New York

AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age. With nearly 38 million members and offices in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP works to strengthen communities and advocate for what matters most to families with a focus on health security, financial stability and personal fulfillment. AARP also works for individuals in the marketplace by sparking new solutions and allowing carefully chosen, high-quality products and services to carry the AARP name.  As a trusted source for news and information, AARP produces the world’s largest circulation publications, AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org or follow @AARP and @AARPadvocates on social media.

###