KEY THOUGHT: AARP is inflaming the war on prescription drug prices by comparing the prices of generic drugs against branded drugs. This comparison is misleading and does a disservice to its members.
According to AARP “brand-name drugs in 2017 were, on average, more than 18 times the price of their generic counterparts. The average annual cost for a generic drug taken regularly was $365, but the price for the brand-name equivalent was close to $6,800”. Of course, generic drugs are significantly cheaper than brand name drugs, because the makers of generic drugs do not have to cover the cost of developing and marketing a new product. According to the FDA, a generic drug is typically 80-85% cheaper than the brand name alternative.
AARP should clarify this and they should also state that most of the new drugs today are specialty drugs that cost a lot of money. It’s also interesting to note that 80% of all Rx’s are generic drugs. AARP should also mention that “while biopharmaceutical companies set the list price for a brand medicine, 40 percent of a medicine’s list price is given as a rebate or discount to the government and middlemen, like insurers and pharmacy benefit managers (PBMs). Insurers negotiate large rebates but do not share these discounts with patients who pay a deductible or coinsurance — a percentage of costs a patient is responsible for paying out of pocket — for their medicine. Ultimately your insurer determines what you pay for your medicine out of pocket”.
I’m not saying that drug companies are blameless. The price of cancer drugs could bankrupt all but the wealthy even with insurance but AARP’s needs to present a balanced and fair assessment of generic drug pricing rather than sensationalize headlines so that people get angrier.