Brand Name Drug Prices Increase Nearly 130 Times Faster Than Inflation

New AARP report shows fourth straight year of double-digit price average annual increases for widely used brand name drugs

Washington/PRNewswire-USNewswire/, December 2016-- Retail prices for brand name prescription drugs widely used by older Americans rose by an average of 15.5% in 2015—almost 130 times faster than the 0.1% general inflation rate—according to a new AARP Public Policy Institute (PPI) report 

AARP's Rx Price Watch Report: Trends in Retail Prices of Brand Name Prescription Drugs Widely Used by Older Americans, 2006-2015, shows that the average annual cost for one brand name drug used on a chronic basis now exceeds $5,800.

For the average older American taking 4.5 prescription drugs per month, this translates into an average annual cost of therapy of $26,000*. This amount exceeds the median income of $24,150 for Medicare beneficiaries.   

Retail Prices for 6 Brand Name Drugs Increased by 500%+ from 2006-2015

"This new report once again highlights the high and unrelenting price increases that are shockingly common in the pharmaceutical market," said AARP Chief Public Policy Officer Debra Whitman.

"What's particularly remarkable is that these incredibly high price increases are still occurring in the face of the intense public and congressional criticism of prescription drug pricing practices."

Highlights of the Rx Price Watch Report

• The average annual retail price increase for widely used brand name prescription drugs was more than two and a half times higher in 2015 (15.5%) than in 2006 (5.9%).
• Brand name drug prices increased almost 130 times faster than general inflation in 2015 (15.5% vs 0.1%).
• In 2015, the average annual retail cost of one brand name medication used to treat a chronic health condition more than $5,800, compared with nearly $1,800 in 2006.
• Retail prices increased for 97% of the 268 brand name prescription drugs in the study's market basket.
• Seven widely used brand name drugs had average annual retail price increases of over 50% in 2015.
• Five of the six drugs with the highest cumulative price increases over the study period were marketed by Valeant Pharmaceuticals. The retail price of Valeant's anti-anxiety drug, Ativan 1 mg tablets, increased by 2,873% between 2006 and 2015.

"Prescription drug therapy is not affordable when its cost exceeds the patient's entire income," said Leigh Purvis, Director of Health Services Research, AARP Public Policy Institute, and co-author of the report.

 "Even if patients are fortunate enough to have good health care coverage, high prescription drug costs translate into higher out-of-pocket costs—especially for those who pay a percentage of drug costs rather than a fixed copayment—as well as higher premiums, deductibles, and other forms of cost-sharing."

Rx Price Watch Report Methodology

AARP's Public Policy Institute, in collaboration with the PRIME Institute at the University of Minnesota, developed a market basket of 268 brand name prescription drug products widely used by older Americans.

Using data from the Truven Health MarketScan® Research Databases, the report analyzed retail price changes between 2006 and 2015 for the drug products in the market basket.

The medications include products in 49 therapeutic categories used to treat common and often chronic health conditions, including high cholesterol, diabetes, and hypertension.

This report is the latest in the AARP Public Policy Institute's Rx Price Watch series. Separate reports analyze price changes for widely used generic and specialty drug products.

The series also analyzes the price changes for an overall market basket (i.e., brand name, generic, and specialty drug products combined) to reflect the overall market impact of drug price changes.

The full report can be found here: http://www.aarp.org/rxpricewatch

*These prices reflect the total costs for specific prescriptions and may not reflect the actual out-of-pocket costs (such as a copay) that a consumer would pay at the pharmacy.

Grassley Seeks to Determine Whether Iowa Taxpayers Overpaid for EpiPens Under Medicaid

WASHINGTON, September 12, 2016 – Sen. Chuck Grassley has asked the Iowa attorney general to review whether Iowa taxpayers have overpaid for EpiPens under Medicaid.  

It appears Minnesota taxpayers may have overpaid for EpiPens by more than $4 million in a single year because the product might have been misclassified under a rebate program. Grassley is concerned about whether Iowans also overpaid. 

“If Minnesota has been potentially overcharged to the tune of $4 million, so too could Iowa. And if that is the case, the people of Iowa ought to be reimbursed for the overcharge,” Grassley wrote to Iowa Attorney General Tom Miller.  “It goes without question that the people of Iowa work very hard for their money, which is why I have committed to intense oversight of not just the federal government and its spending habits, but oversight of private companies that profit handsomely off federal and state government programs supported by Iowans’ taxpayer dollars.  …

“Iowans are rightly concerned about the high price of EpiPens. Accordingly, I urge you to review whether the state of Iowa and the people of Iowa have been overcharged by the potential misclassification of Mylan’s EpiPen as a generic drug. Please advise on what steps you are taking, or intend to take, on whether Iowa was overcharged, and if so, by how much.”

Grassley said it also would be helpful to know how much the state of Iowa has spent on EpiPens in the past five years.  Grassley said he would appreciate a response by Sept. 20.

Grassley said that under the Medicaid drug rebate program, branded drugs and authorized generic drugs carry a higher rebate than generic drugs.  If Mylan’s EpiPen was classified as a generic drug, the company would have paid the lower rebate, perhaps incorrectly, causing states to pay more. Grassley is interested in whether an incorrect classification involving EpiPens has bearing for other companies and drugs in the rebate program and if so, whether adequate oversight of the program exists.

“This information will be helpful as Congress works to understand whether the generic drug classification system is working as intended and whether drug companies and the Centers for Medicare and Medicaid Services are fulfilling their responsibilities under the program,” Grassley wrote.

Grassley wrote that the Minnesota attorney general opened an inquiry into the EpiPen pricing and the effects on the people of Minnesota, including through the school system. 

Grassley began his inquiry on the high cost of EpiPens on Aug. 22, when he wrote to the manufacturer of the EpiPen, used for emergency treatment for life-threatening allergic reactions, seeking an explanation of the steep price increase in the product in recent years.  Grassley’s letter came after Iowans expressed concern to him about the prices.  

Grassley then led a letter from five senators to the Food and Drug Administration, seeking details on whether alternatives to the EpiPen are in the works.  He also was one of three senators who asked the Centers for Medicare and Medicaid Services regarding the effects of the price increases on public health care programs.  

The company has since announced expanded patient assistance programs and a generic version of the product.

AHF: Committee Sues Jon Husted, Ohio Secretary of State, Over Voter Signatures on Drug Price Ballot Measure

AHF sues to restore voter signatures in support of a ballot measure to lower drug prices for state programs in Ohio

Legal action, filed as a Complaint in Original Action in Mandamus with the Supreme Court of Ohio today over improper rejection of voter signatures by Secretary Husted, seeks to restore the signatures on a ballot measure intended to lower drug prices for state programs in Ohio.

The Court had previously dismissed, without prejudice, a lawsuit seeking restoration of the voter signatures, writing at the time that the lawsuit was “premature,” pending the resolution of a separate, but related OSC lawsuit brought by PhRMA seeking to invalidate voter signatures on the ballot measure.

The Supreme Court of Ohio issued a ruling in the PhRMA case denying most of PhRMA’s claims and objections on the signatures; however, one part of the ruling now compels backers of the Ohio Drug Price Relief Act to collect an additional 5,044 voter signatures by August 25^th—making the backers’ prior legal action to restore the voter signatures urgent, and no longer “premature.”

August 22, 2016  --(BUSINESS WIRE)--Members of the citizens’ committee sponsoring the Ohio Drug Price Relief Act filed a new legal action (Case No. 2016-1235) today with the Supreme Court of Ohio against Ohio Secretary of State Jon Husted over voter signatures in support of a ballot measure to lower drug prices for state programs in Ohio that backers allege were unlawfully invalidated by Secretary Husted earlier this year.

The legal action was filed as a Complaint in Original Action in Mandamus with the Supreme Court of Ohio .

The Supreme Court of Ohio had previously dismissed (without prejudice) a lawsuit by members of the drug pricing ballot measure citizens’ committee that was seeking restoration of the voter signatures, writing at the time that the backers’ lawsuit was “premature,” pending the resolution of a separate, but related lawsuit brought in the SCO by PhRMA (the Pharmaceutical Research and Manufacturers Association, the lobbying association of large drug manufacturers) in conjunction with the Ohio Manufacturers’ Association seeking to invalidate voter signatures on the ballot measure.

On Monday, the Supreme Court of Ohio issued a ruling in the PhRMA case denying most of PhRMA’s claims and objections on the signatures; however, one part of the ruling now compels backers of the Ohio Drug Price Relief Act to collect an additional 5,044 voter signatures by August 25^th—making the citizens’ committee’s prior legal action to restore the signatures urgent, and no longer “premature.”

In its lawsuit, the Ohio drug pricing advocates assert:

“The instant action is a re-filing of State ex rel. Tracy L. Jones, et al. v. Jon Husted, et al., Case No. 2016-455, but is more limited in scope based on the Court’s August 15, 2016 decision in Ohio Mfrs. Assn. v. Ohioans for Drug Price Relief Act, Slip Opinion No. 2016-Ohio-5377 which invalidated 10,303 signatures from the petition proposing the Ohio Drug Price Relief Act to the General Assembly (“the Petition”), leaving the Petition 5,044 signatures below the constitutionally required threshold. However, the Court in Ohio Mfrs. Assn. also held that it is improper to invalidate part-petitions because they contain signatures crossed out by someone other than the circulator, signer, or signer’s attorney-in-fact. The instant action seeks to recover such signatures that were rejected by Respondent and various county boards of elections. The recovery of these signatures would more than make up the deficiency and further would moot the portion of the Court’s decision that “[i]f the secretary certifies enough valid signatures, then he shall resubmit the initiative to the General Assembly, in accordance with the terms of the Ohio Constitution, Article ii, Section 1b.” Id. at ¶47.”

The Ohio Drug Price Relief Act will amend Ohio law to require state programs to pay the same or less for prescription medications as the U.S. Department of Veterans Affairs¹.

Backers intended to have the initiative appear on Ohio’s November 2016 presidential election ballot, but obstructionist—and backers believe, illegal—moves by Secretary of State Husted have forced the ballot measure proponents to aim for the November 2017 Ohio ballot instead.

“Secretary of State Jon Husted rode roughshod over local County Board of Elections that twice certified voter signatures for the Ohio Drug Price Relief Act when he eliminated those signatures, an act that thwarted attempts to get this measure before voters and on the ballot in Ohio,” said Michael Weinstein, President, AIDS Healthcare Foundation, the sponsor and primary funder of the measure.

“Now, Monday’s Supreme Court ruling in the PhRMA case forces backers to gather an additional 5,044 signatures by August 25^th in order to compel Secretary Husted to transmit the proposed law to the Ohio legislature, as legally required under the Ohio Constitution. However, the ruling also appears to overturn Husted’s invalidation of more than 20,000 signatures previously thrown out by him.

The committee is now suing to get further clarity from the court and restore those other signatures—which are more than enough to force Husted to advance this measure for consideration and possible action by the Ohio legislature as the next step in the process of ultimately bringing this drug pricing issue before Ohio voters in ballot measure form in November 2017.”

AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to over 614,000 individuals in 36 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook:www.facebook.com/aidshealth and follow us on Twitter: @aidshealthcare and Instagram:@aidshealthcare

¹ V.A. pricing is generally believed to be 20% to 24% lower than for almost any other government program.

NHeLP Urges Action on High Drug Pricing

WASHINGTON, March 7, 2016--The National Health Law Program (NHeLP) sent a letter to Senators Ron Wyden and Chuck Grassley supporting the Senate Finance Committee's investigation into high prices for hepatitis C prescription drugs and barriers to access for Medicaid beneficiaries. 

The committee requested public comments in January 2016 on its investigation into biopharmaceutical company Gilead and Sovaldi and Harvoni, Gilead's breakthrough hepatitis C treatments. 

"As we have seen with HIV treatments, drug company profiteering and high costs prevent people from getting the care they need," said Wayne Turner, NHeLP staff attorney who led the successful 2014 HIV anti-discrimination complaint against four insurance companies. 

"When people with chronic diseases like hepatitis C are unable to afford treatments due to state restrictions or discriminating company policies, federal action is necessary."

In 2014, The AIDS Institute and NHeLP filed a complaint with the U.S. Department of Health and Human Services' Office for Civil Rights (OCR) charging four Florida health plans with unlawful discrimination against people living with HIV and AIDS by placing all HIV medications, including generics, on the highest cost sharing tier, thus requiring enrollees to pay as much as 50 percent co-insurance for every HIV drug. 

In the complaint, the groups contend that such practices discourage people with HIV/AIDS from enrolling in the plans and violate the Affordable Care Act's (ACA) non-discrimination provisions. The ACA bans plans from discriminating against individuals based upon disability and prohibits them from discouraging enrollment by people with significant health needs.

"Since the passage of the Affordable Care Act, we have monitored Medicaid enrollment efforts across the country to ensure states are making every effort to help residents obtain adequate health insurance coverage, which should include affordable prescription drugs," said Jane Perkins, NHeLP legal director. 

"Restrictions on breakthrough treatments are blatantly illegal and violate federal Medicaid requirements and the ACA's non-discrimination provisions."

"Low-income individuals so often are the most in need of breakthrough treatments and are the least likely to afford them," said Abbi Coursolle, NHeLP staff attorney. "It is inherently unfair for Medicaid beneficiaries to be both denied treatments simply because they are expensive and unable to afford the two most widely used medications because of the company mark-up."