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AARP Rx Watchdog Report Finds Specialty Drug Prices Soar

WASHINGTON, September 25, 2008 -According to a report released today by AARP, drug manufacturers have substantially raised prices on the 144 specialty drugs most commonly used by people in Medicare Part D.

The latest AARP Rx Watchdog Report, from AARP’s Public Policy Institute, is the first to look at what drug makers charge for specialty drugs, which include prescription medications used to treat complex, chronic conditions and require special administration, handling and care management.  Specialty drugs are currently among the most expensive drugs on the market, with prices that can range from $5,000 to more than $300,000 per year.

According to the report, the prices of specialty drugs most commonly used by Medicare Part D beneficiaries have risen faster than the general inflation rate every year since 2004, peaking in 2007 when the price spiked by 8.7% – or three times the general rate of inflation (2.9%).

“The skyrocketing cost of specialty drugs is especially tragic for those suffering from diseases like cancer and multiple sclerosis,” said John Rother, AARP Executive Vice President of Policy and Strategy.  “These drugs can provide comfort and hope to these individuals and their families.  But even the most miraculous drug is useless if a person can’t afford to take it.”

The report concludes that rising specialty drug prices threaten consumers by increasing out-of-pocket spending for those beneficiaries who pay a percentage of drug costs (coinsurance) rather than a fixed dollar amount (copayment).  It also increases the risk of individuals falling into the “donut hole” coverage gap in Part D, where individuals are responsible for paying all their drug costs.  Furthermore, higher prices more quickly push Part D enrollees into catastrophic coverage, increasing the burden on taxpayers who help subsidize their costs.

“Specialty drug makers continue to raise the costs of drugs that have already been developed and tested,” said Rother.  “By doing so, they’re increasing the burden on people with chronic conditions who can least afford it, as well as employer-sponsored health plans and even the American taxpayer through increased Medicare spending.  If they have a good reason, we’d like to hear it.”

AARP continues to fight to make prescription drugs more affordable for all Americans.  The organization supports federal legislation to allow the Food and Drug Administration to create a safe pathway for cost-effective generic biologics and advocates for removing barriers that delay the speedy introduction of lower costs generic drugs.  AARP also supports legislation that would allow Americans to safely and legally import lower priced prescription drugs from other countries, as well as promoting evidence-based research.

“These policies can help millions of Americans better afford their prescription drugs by increasing competition and putting downward pressure on prices,” concluded Rother. “Congress has options – now we need results.”


For the complete Watchdog report visit:

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole.  AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates.  We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 33 million readers; AARP Bulletin, the go-to news source for AARP's 40 million members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website,  AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors.  We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

Posted: September 2008