Prices for specialty drugs continue to rise at a pace that far exceeds inflation.
A new study from AARP and a research unit at the University of Minnesota found the average annual retail price for 101 commonly used specialty medications hit $52,486 in 2015, an increase of 9.6 percent compared with the previous year.
The average annual price of the drugs nearly tripled over a 10-year period, according to the report, which comes as employers and health plans are citing high-priced medications as a key driver in overall health care costs.
“I think it really drives home the importance of trying to find solutions to this problem,” said Leigh Purvis with the AARP Public Policy Institute.
The trade group for pharmaceutical manufacturers disputed the report, saying the AARP methodology “cherry picks” the medicines that it includes under the label of specialty pharmaceuticals.
The report also ignores the impact of discounts and rebates that health plans and pharmaceutical benefit managers (PBMs) negotiate with drug companies to reduce the actual cost, said Holly Campbell, a spokeswoman with the Pharmaceutical Research and Manufacturers Association (PhRMA). She said recent reports from two large PBMs cited drug spending increases of less than 4 percent in 2016.
“AARP’s report maintains the flawed methodology of earlier efforts which has been criticized for misrepresenting the dynamics of the competitive marketplace for medicines,” Campbell said in a statement.
Specialty drugs as defined by the report include those administered by injection and medicines that exceed certain price thresholds. They often require special handling and storage, AARP said, and are used to treat conditions such as rheumatoid arthritis, multiple sclerosis and cancer.
The AARP report was developed in conjunction with the Prime Institute at the University of Minnesota, which has developed the methodology used to examine retail drug price trends in specialty, brand and generic medicines.
Researchers would use pricing data that reflects negotiated discounts if they had access to the numbers, said Purvis of AARP. The 101 specialty drugs included in the AARP study are the most commonly used specialty pharmaceuticals used by people over age 50, Purvis said.
“Our market basket is based on utilization and sales,” she said. “This is not a cherry-picked market basket at all.”
A second report Thursday from AARP and U researchers found the average price of generic medications fell by 19.4 percent between 2014 and 2015. The drop in the average annual retail price of one therapy from $714 to $523 was the steepest one-year decline in a decade.
It’s difficult to say what exactly drove the decline, Purvis said, although competition was likely a factor.
It’s not yet clear what happened with overall medication price trends between 2014 and 2015, Purvis said. A report later this year from AARP is expected to combine the specialty and generic drug price trends with trends for brand-name medications.
In previous years, price increases for specialty and brand medications have outweighed discounts in generic prices, she said.