June 15, 2021
Drug Prices Rose at Twice the Inflation Rate in 2020
Leading House Democrats this week said they’ll try to incorporate the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3) — the bill that allows Medicare to directly negotiate reduced medication costs — into whatever infrastructure and jobs plan Congress hammers out over the summer. House Energy and Commerce Committee Chairman Frank Pallone, Jr. (NJ) told reporters on Monday that he hopes to attach the legislation to the package.
The importance of lower drug prices was reinforced by a new analysis released this week. The average yearly price rise for brand-name prescription medications commonly used by older Americans increased by 2.9% in 2020, double the country’s overall inflation rate of 1.3%. While this was a slower annual increase than in previous years, the findings in the report also revealed that insurance-negotiated costs for 260 brand-name prescription medications had climbed faster than general inflation, on average, every year since 2006.
The report goes on to say that if present trends continue, Americans should expect that their out-of-pocket costs will rise, including increased deductibles, premiums, and cost sharing. The research provides further evidence of what many already were painfully aware of: that rising drug prices impose a severe burden on taxpayer-funded programs like Medicare.
“For years these drug prices have gone way beyond merely keeping up with inflation,” said Richard Fiesta, Executive Director of the Alliance. “Pharmaceutical corporations are actively engaging in price gouging, and House leaders are doing the right thing by taking the next opportunity to pass H.R. 3.”