A new report from AARP found that the 25 drugs that accounted for the highest Medicare Part D spending in 2021 more than tripled in price since they first came on the market. According to the report, list prices for 25 top Medicare Part D drugs increased by an average of 226% since they first entered the market. Additionally, the lifetime list price changes of the prescriptions “increase dramatically” the longer a product is on the market, with an average of 60% of the current list price due to price increases after the product entered the market.
The top 25 products have been on the market for an average of 14 years. The average lifetime price increase for the seven products on the market for less 12 years was 58%, compared to the average lifetime price increase for the five products on the market for 20 years or longer as 592%.
For example, Humira (on the market since 2002) has increased 562% in its lifetime, while the lifetime general inflation is 66%. Lantus (on the market since 2000) has increased in list price by 739% in its lifetime, compared to a 71% lifetime general inflation rate. Novolog (on the market since 2000) has increased 628% during its lifetime, compared to a 71% lifetime general inflation rate and Enbrel (on the market since 1998) has increased 701% over its lifetime, compared to an 85% lifetime general inflation rate.
Some of the smaller increases come from Trulicity (on the market since 2014), with a 91% lifetime list price change compared to a 28% lifetime general inflation rate and Ozempic (on the market since 2017) with a 38% lifetime list price change compared to a 22% lifetime general inflation rate. Trelegy Ellipta (on the market since 2017) is the only product on the list with a lower lifetime list price change (20%) than lifetime general inflation rate (23%). Biktarvy (on the market since 2018) has close rate differences (29% lifetime list price change compared to 22% lifetime general inflation.
AARP concluded by noting that while “individual prescription drug price increases naturally attract attention, it is equally important to recognize that these increases typically build on a lengthy history of earlier increases.” They went on to say that while this is a “relatively small subset of brand-name prescription drugs,” the pricing trends found in the analysis are widespread, and another reason the Inflation Reduction Act is necessary because it will “discourage drug companies from engaging in this type of lifetime pricing behavior in the future.”
It’s important to note that this report only references the list price, and that after discounts, the actual cost-to-patient is likely much less. However, AARP notes that the findings in the report “highlight the importance of the Inflation Reduction Act and its inflation-based rebates that will require drug companies to pay Medicare when they increase their prices faster than inflation.”