The cost of widely used specialty prescription drugs, requiring special administration and handling and used to treat conditions including cancer, rheumatoid arthritis, and multiple sclerosis, grew more than three times faster than general inflation in 2017, according to a new AARP Public Policy Institute report released this month. The AARP report found that the average annual price for a single specialty drug used on a chronic basis is now nearly $79,000, compared to $27,824 in 2006.
According to the AARP report, the average annual cost for a single specialty drug was almost $20,000 more than the median U.S. household income ($60,336), more than three times the median income for Medicare beneficiaries ($26,200) and over four-and-a-half times higher than the average Social Security retirement benefit ($16,848).
AARP’s 30-page report, released on June 25, also found that the average annual price for one specialty medication would have been $29,843 in 2017—almost $50,000 lower—if the retail price changes for these products had been limited to general inflation between 2006 and 2017.
“Prescription drugs are not affordable when their prices exceed the patient’s entire income,” said Debra Whitman, AARP’s Executive Vice President and Chief Public Policy Officer. “Unfortunately, drug prices seem to be in a never-ending race to the top, leaving more and more people unable to afford the medications they need,” says Whitman.
The Skyrocketing Prices of Specific Specialty Drugs
AARP’s report also noted that retail prices for 97 commonly used specialty drugs increased by 7 percent, compared to the general inflation rate of just 2.1 percent. The researchers also found that specialty medications were more than 215 times more expensive than widely used generic drugs ($78,781 vs. $365), and almost 12 times more than widely used brand name drugs ($78,781 vs. $6,798).
The huge cost increases were noted in specific pharmaceuticals. For instance, Revlimid, used to treat cancer, had the highest annual price surge of the 30 top selling specialty drugs at 21.4 percent, going from $203,928 in 2016 to $247,497 in 2017. Revatio, a pulmonary hypertension medication, had the single highest retail price increase (48 percent) among the 97 most widely used specialty drugs.
“Specialty drugs account for the majority of the prescription drugs that were approved by the FDA in recent years,” said Leigh Purvis, Director of research at AARP Public Policy Institute. “Given the remarkably high prices associated with such products, it is imperative that policymakers finally enact meaningful changes that target drug manufacturers’ pricing behavior,” adds Purvis.
For AARP’s latest Rx Price Watch Report, “Trends in Retail Prices of Specialty Prescription Drugs Widely Used by Older Americans: 2017 Year-End Update,” go to https://www.aarp.org/content/dam/aarp/ppi/2019/06/trends-in-retail-prices-of-specialty-prescription-drugs-year-end-update.doi.10.26419-2Fppi.00073.001.pdf.