AARP Eye Center
Rarely has the dark side of greed been on such public display as the revelation that Martin Shkreli, former CEO of Turing Pharmaceuticals, raised the price of the drug Daraprim by more than $700 a pill. This was an extreme example of manipulating the marketplace but, lost in all the outrage about Mr. Shkreli, was the real story – prescription drug costs might not be increasing by $700 a pill, but they are going up much faster than the overall inflation rate. This is causing financial hardships for millions of Americans.
AARP’s Public Policy Institute released a report in February that detailed how the costs of the most commonly-used prescription drugs by Older Americans have increased since 2006. The report notes that in every year since 2006 (data is not yet available for 2014 and 2015) the costs of prescription drugs rose faster than the rate of inflation. And it isn’t as if these costs were just barely more than the inflation rate. In 2013, drug prices increased by an average of 9.4% while the inflation rate was only 1.5%.
This is a disturbing trend, not only for those that are directly impacted by paying more for the prescription drugs they rely on, but for all Americans. The increased utilization of prescription drugs has significantly changed health care in the United States. Prescription drugs help manage diseases that were previously untreatable. Advances in prescription drug research allow many Americans to live longer, healthier lives, to lower hospitalization rates, and avoid costly medical procedures.
Some medications are extremely expensive, and many health insurance plans may not cover those particular prescription drugs, resulting in a situation where some treatments may only be available to those who can afford them.
The upward trend in prescription drug prices hits older Americans particularly hard in an era when inflation rates are low. Many older Americans live on relatively fixed incomes, and in a year like 2016, when there is no Social Security cost-of-living increase, paying more for prescription drugs means not being able to afford other necessities. In addition, rising drug prices means rising insurance rates, and increased costs to government programs that pay for prescription drugs. Pennsylvania’s PACE and PACENET programs, which provide prescription drug assistance to lower and middle income older Pennsylvanians, has seen its costs increase in the past few years because of rising prescription drug costs, meaning lottery revenues are not able to help as many people.
AARP continues to support a change in federal law which would allow Medicare to negotiate the cost of prescription drugs with drug manufacturers. The vast buying power of Medicare could result in lower prescription drug prices for older Americans. But such a change has not moved through Congress, and prospects for its approval do not appear to be good.
The importance of prescription drugs in our health care system will continue to grow. How to address the rising costs of these drugs is a question our elected officials simply cannot shove to the side if the goal is to allow all Americans to have access to prescription medications.