Older Americans paying the price for brand name prescription drugs

KEY TAKEAWAY:Retail prices for widely used brand name prescription drugs increased substantially faster than general inflation in every year from 2006 to 2015. Between 2014 and 2015, retail prices for 268 brand name prescription drugs widely used by older Americans, including Medicare beneficiaries, increased by an average of 15.5 percent. In contrast, the general inflation rate was 0.1 percent over the same period.

In 2015, the average cost of therapy for a brand name prescription drug, based on the market basket in this study, was more than $5,800 per year. [inlinetweet prefix=”” tweeter=”” suffix=””]On average, older Americans take 4.5 prescription drugs every month[/inlinetweet]. [inlinetweet prefix=”” tweeter=”” suffix=””]Older adult who uses brand name prescription drugs is likely to have experienced an average annual retail cost of drug therapy of more than $26,000 in 2015[/inlinetweet]. This amount exceeds the median annual income for individual Medicare benficiaries.

Key Findings:

Between 2014 and 2015, retail prices for 268 widely used brand name prescription drugs increased by 15.5 percent, marking the fourth straight year of double-digit average annual price increases.

Brand name drug prices increased almost 130 times faster than general in inflation in 2015 (15.5 percent versus 0.1 percent).

Between January 2006 and December 2015, retail prices for 113 chronic-use brand name drugs that have been on the market since the beginning of the study increased cumulatively over 10 years by an average of 188.7 percent.  The cumulative general inflation rate in the US economy was 19.4 percent during the same 10-year period.

KEY INSIGHT:

Clearly the “drug pricing issue is not going to go away.  Mr Trump has promised to bring drug prices down and Sen Sanders is still targeting drug companies via some very effective media releases. [inlinetweet prefix=”” tweeter=”” suffix=””]The current model, of annual price increases for Rx drugs is NOT sustainable.  [/inlinetweet]

We expect DTC marketing budgets to come under more pressure as executives look for ways to improve balance sheets.  DTC marketers are going to come under intense pressure to prove ROI and clearly show the link between DTC marketing and ROI.