It's almost that time of year again, the annual open enrollment period for Medicare Part D (prescription drug coverage) that will take place from 15 October to 7 December 2018. We'll have a more detailed discussion of that here in a couple of weeks.
For now, you should know about the most recent annual report from the AARP Public Policy Institute titled (exhaustively), AARP Public Policy Institute Trends in Retail Prices of Brand Name Prescription Drugs Widely Used by Older Americans: 2017 Year-End Update.
It was released last week and it is not good news. According to the report, summarized at AARP,
The retail prices of some of the most popular prescription drugs older Americans take to treat everything from diabetes to high blood pressure to asthma increased by an average of 8.4 percent in 2017, far exceeding the 2.1 percent inflation rate for other consumer goods and services...
“The report shows that the annual average retail cost for just one popular brand-name drug among the 267 that AARP studied would have been nearly $6,800 in 2017.
“But had pharmaceutical price increases been limited to the country’s general inflation rate between 2006 and 2017, that cost would have been more than $4,600 lower. Retail prices increased in 2017 for 87 percent of the brand-name drugs studied.”
The report notes that the retail price of one widely used brand-name drug to treat fibromyalgia, Lyrica,
”...increased by 19.3 percent; the price of diabetes drug Januvia increased by 8.2 percent; and the price of Benicar, a widely used medicine for high blood pressure, increased by 17.8 percent.”
Here is a chart from page 12 of the report showing what the average price of the prescription drugs would be if increases had matched overall inflation:
The researchers have sliced and diced their price findings about a dozen different ways but the numbers come out all the same: jaw-dropping increases. Among the highlights (well, I suppose we ought to call them lowlights):
• “Brand name drug prices increased four times faster than the 2017 general inflation rate”
• “Retail prices in 2017 increased for 87 percent of the 267 brand name drugs studied”
• “Retail prices for 113 chronic-use brand name drugs on the market since at least 2006 increased cumulatively over 12 years by an average of 214 percent compared with the cumulative general inflation rate of 25 percent between 2006 to 2017”
After a lifetime of good health requiring no more prescription drugs than an occasional antibiotic, I found out first hand this past year about the cost of drugs. It's frightening.
One of the giant problems with Medicare prescription drug plans is that none of us has any way to predict what drugs we may need in the coming year and the varying providers have different formularies.
Since I am not a fortune teller, until my cancer diagnosis in 2017, I had always chosen the cheapest coverage.
Then, during the Part D enrollment period for 2018 last year, I knew what drugs I would need to continue taking I made an informed choice of which policy would be best for me.
That worked well enough until, in May, I was prescribed an expensive drug not covered by my provider. Oof. That was tough.
Many Medicare beneficiaries who take more than one or two prescription drugs has his/her own story about that kind of sticker shock but we'll discuss that another day.
Among the study's concluding observations are these two strong charges:
”Current market forces do not adequately protect against excessive brand name drug prices and price increases, and the resulting growth in pharmaceutical expenditures is not sustainable.”
“Current pricing practices for brand name pharmaceuticals are a threat to the health and financial security of individual consumers and to taxpayer-funded programs like Medicare and Medicaid.
“Brand name prescription drugs can provide substantial health benefits including improved health outcomes; however, these benefits are only available to those who can afford to use them.”
You can read the full AARP report here. [pdf]