AARP: There You Go Again

AARP: There You Go Again

03.29.11 | By

Once again, AARP has released a report on the prices of medicines that distorts the reality of the marketplace. This time around, AARP took its same market basket of medicines it has used since 2006 and analyzed solely the prices for brand name drugs, excluding generics entirely.

As we've looked at in previous posts, that's a flawed method for evaluating drug prices because it doesn't accurately portray what consumers are actually paying. You'll recall that a new analysis, looking at both brand and generic drugs used by patients, shows prices for the "top 25" drugs highlighted in the last AARP report fell by 21 percent from 2006 through 2009. This reflects the mix of brand and generic drugs used by patients.

Moreover, not only do these price reports paint an inaccurate picture of drug prices, they don't paint the whole picture. The fact is, drug costs are at historic lows. We also covered that topic recently. Between 2004 and 2009, medicines represented 10 percent of the growth in total health care spending, compared to 90 percent for all other health care services. This is a decline from the prior decade, when medicines accounted for 14 to 16 percent of total health care spending growth in the U.S.

It also should be noted that for Medicare beneficiaries, the Medicare Part D program is offering seniors unprecedented access to medicines at an affordable cost. Just recently, the Congressional Budget Office released new data that reduced its 10-year projection of federal spending on the Part D program by about $120 billion. The lower-than-projected cost of the program is reflected in low monthly premiums for beneficiaries - this year the average premium in Part D is $30.

AARP may not like them, but these are the facts.

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