Prescription drug prices continue to rise at alarming rates, leaving many older Americans struggling to afford the medications they need.
AARP’s most recent Rx Price Watch Report found that the average price of brand-name drugs widely used by older Americans increased at four times the rate of inflation in 2017 alone. In one case, the average annual cost for a brand-name drug used on a chronic basis was more than $6,800, almost $1,000 higher than the average annual cost just one year earlier.
These costs are especially burdensome for older adults, as the average senior takes 4.5 medications each month. In fact, in 2015, Medicare beneficiaries spent nearly $27 billion in out-of-pocket costs for the prescription drugs they need.
If these trends continue, older adults — particularly those on fixed incomes — will be unable to afford their prescription drugs, leading to poorer health outcomes and higher health care costs in the future.
To make matters worse, Medicare prescription drug benefits are now under siege in Washington.
Congress did a good thing earlier this year when it passed a law that would close the Medicare Part D donut hole a year early and require drug manufacturers to provide bigger discounts on brand name drugs. Those steps would help beneficiaries with high drug costs move more quickly into catastrophic coverage, where their out-of-pocket costs are substantially lower. If allowed to continue, those reforms would save seniors an estimated $6.7 billion between 2020 and 2027.
But now, big drug companies are spending millions trying to strong arm members of Congress into breaking that deal. They want to forget about closing the donut hole a year early and reduce discounts on brand name drugs for Medicare Part D beneficiaries. Eliminating those reforms would deliver an estimated $4 billion more in profits to pharmaceutical companies over 10 years — resources that would be much better used developing drugs to treat diseases such as Alzheimer’s and Parkinson’s.
Most importantly, rolling back the donut hole deal would be a terrible blow to seniors. Over 40 million older Americans rely on the Medicare Part D prescription drug benefit to help them pay for life-saving medicines. An increasing number of them already are forced to decide between paying for necessities like heat, electricity or food or filling their prescriptions.
While that political battle continues in Washington, fortunately there is good news for Pennsylvania’s older adults looking for help paying for medications.
Thousands of older state residents now qualify for prescription drug assistance under a new law that increases income limits for the state’s Pharmaceutical Assistance Contract for the Elderly Needs Enhancement Tier (PACENET) program.
AARP strongly supported House Bill 270 that was unanimously approved in the final days of the 2018 legislative session in Harrisburg and signed into law by Gov. Wolf. The bill raised the maximum income limits for the PACENET program for the first time in 15 years from $23,500 to $27,500 for individuals 65+ and from $31,000 to $35,500 for married couples.
State officials estimate that the expanded income guidelines will make PACENET benefits available to 17,000 additional older adults statewide. That income eligibility increase was long overdue and is great news for those seniors who need help paying for prescription drugs. Perhaps best of all, those benefits were expanded using proceeds from Pennsylvania Lottery ticket sales—and not tax revenues.
At AARP, we are acutely aware of the difficult decisions facing older adults who struggle to afford the drugs they need. As drug prices continue to rise, we must keep in place policies that make it easier for older adults to access their medications. We believe it’s critical that any proposals to lower prescription drug costs don’t simply shift the costs without addressing the root problem: the prices set by pharmaceutical companies.
The bottom line is rising prescription drug prices impact all of us — not just seniors — through higher health insurance premiums and cost sharing. Left unchecked, drug prices will lead to increased costs for a wide range of social safety net programs, which will generate either higher taxes or reductions in benefits.
In the end, older adults struggling to make ends meet shouldn’t have to choose between putting food on the table and buying the medicine they need to stay healthy.