AARP: Wrong About Drug Prices

AARP, the huge organization of seniors and not-so-seniors (age fifty and up), has been publishing quarterly reports on the prices of branded drugs since 2005. The reports focus on the drugs most used by the elderly, and they invariably conclude that prices have been increasing much faster than inflation. The latest report, released on August 25, 2010, looked at the prices of 217 branded drugs. It found that, on average, prices increased by 8.3 percent in 2009 while the overall consumer price index declined by 0.3 percent. Remarkably, all but six of the 217 drugs registered increases. But this conclusion is misleading: after factoring in generic-drug prices — which AARP ignores — drug costs for the elderly are actually decreasing.

Full report from American Enterprise Institute here.

Comments (4)

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  1. Virginia says:

    And why, praytell, would the AARP engineer their study to make it look like drug costs are increasing? Do divert more money to Medicare? I wouldn’t give them that much credit. Perhaps they’re trying to sell more of their special “AARP-brand” insurance to seniors.

  2. Devon Herrick says:

    I saw the study. The past several years, drug expenditures mostly stayed flat. The reason is an increase in generic drugs and blockbuster drugs losing patent protection.

    Many of the drugs AARP complained rose in price have good OTC or generic substitutes. Moreover, the brand drugs that rose fastest were the ones about to lose patent protection.

  3. Stephen C. says:

    I’m with Virginia. What nefarious motive lies behind AARP’s faulty study?

  4. Madeline says:

    Good post. Glad you are keeping on top of these things.