Retail prices for brand-name prescription drugs widely used by older Americans declined by an average of 1.4% in 2024, according to the latest AARP Rx Price Watch Report. This was the first overall decrease in the 20-year history of the report.
The decline was driven largely by targeted price cuts for certain insulins and asthma inhalers after years of advocacy and intense public scrutiny. Even so, most drug companies continued to raise prices, with three-quarters of brand-name drugs increasing in cost and nearly half of these increases exceeding inflation.
"Prescription drugs remain unaffordable for too many older Americans," said Leigh Purvis, the organization's prescription drug principal. "While it's encouraging to see an overall drop in prices, many brand-name drug prices are still rising faster than inflation. It's also important to note that the price decreases in 2024 were voluntary and could just as easily reverse in the future. That's why legislative changes like Medicare drug price negotiation play such a critical role in ensuring that older Americans have affordable access to the prescription drugs that they need."
Among other key findings in the report:
- The average annual cost for a single brand name-drug was nearly $13,000 in 2024.
- For the average older Americans taking 4.5 prescriptions a month, the annual cost of drug therapy would exceed $58,000. This amount is more than 30% higher than the median Medicare beneficiary income ($43,200).
- If brand-name drug prices had risen only at the rate of inflation since 2006, older Americans would be paying more than $10,000 less per drug per year in 2024. For someone taking multiple medications, this translates into tens of thousands of dollars in additional costs.
"Recent price trends are an improvement, but our longitudinal data show that the voluntary pricing practices of drug companies have led to price trends that routinely exceed the corresponding rate of general inflation," the report said.
AARP encourages policymakers interested in long-term, meaningful changes in brand- name drug prices to pursue options that go beyond voluntary and temporary pledges from drug manufacturers.
"Policy options should also strike a balance between encouraging meaningful pharmaceutical innovation and ensuring consumers can access and afford the prescription drugs they need," the report said. "Brand-name prescription drugs can provide substantial health benefits, including improved health outcomes; however, these benefits are available only to those who can afford to use them."
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