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Drug price hikes cost taxpayers $110 billion


It’s well known that prescription drug prices are skyrocketing in America. Price increases for brand name drugs have far exceeded the rate of inflation since at least 2006, according to AARP’s Rx Price Watch report. And the average annual cost for just one brand name drug taken on a chronic basis was about $6,800 in 2017, almost $1,000 more than in 2015. However, it’s not just patients paying for greedy Big Pharma practices that help keep drug prices high— it’s also taxpayers.

As part of AARP’s Stop Rx Greed campaign to help lower drug prices, the AARP Public Policy Institute (PPI) released a new analysis in October 2019 showing that Medicare (meaning beneficiaries and taxpayers) spent an extra $110 billion in recent years just on drug price increases that exceeded general inflation. That is an enormous amount of unnecessary spending.

It’s also worth a whole lot of gas and groceries, as illustrated in a new AARP interactive infographic. We ran the numbers, which show that $110 billion in the U.S. could:

  • Cover rent for 9 million American families for a year
  • Pay a year of college for 9 million American students
  • Buy groceries for 25 million American families for a year
  • Buy gasoline for 56 million American families for a year

Let that sink in for a moment.

To reach the $110 billion figure, PPI analyzed 2013-2017 data from the Center for Medicare & Medicaid Services’ Medicare Part D Spending Dashboard and Medicare Part B Spending Dashboard. PPI compared annual price changes for each drug to what they would have been if limited to the rate of general inflation and used the revised drug prices to generate updated Medicare spending estimates.

AARP DC is fighting to lower drug prices for not only seniors but for all District residents. We’re pushing for action on legislation and policies that will lead to meaningful, substantive reform and finally provide relief from high prescription drugs prices.

AARP DC will not stop fighting until everyone can afford the medications they need.

To learn more about AARP’s efforts to Stop Rx Greed, visit

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