Prices for a number of generic prescription drugs most commonly used by seniors saw their smallest decline in nearly a decade in 2013, according to a new report. Researchers say it's the start of a trend that could limit access to some medications for many elderly patients.
An AARP report (PDF) released Thursday found the overall average retail price for 280 generic medications widely taken by adults ages 50 and older declined by 4% in 2013. That marked the smallest annual decrease over the eight-year period reviewed in the analysis. The average annual price for one drug was $283 in 2013, unchanged from the previous year and the lowest retail price since 2005.
The annual retail price decreased for nearly three-quarters of the 280 drugs reviewed in the report, with the prices of 10 drugs decreasing between 30% and 75%. But those decreases were not enough to offset the price increases found among 75 medications in 2013, where 11 drugs had increases of 30% and greater, including two whose cost rose by more than 1,000%.
The findings are indicative of a decade-long downturn in the rate of declines for generic drugs, which researchers say could mark the beginning of the end for decreases in the cost of such drugs.
“A lot of the factors that seem to be driving this reversal do not seem to be going away any time soon,” said report co-author Leigh Purvis, director of Health Services Research for AARP's Public Policy Institute. “I do think we are going to be seeing more of this type of behavior in the form of price increases going forward.”
Purvis pointed to several factors that have contributed to the change in generic prices, not least of which is the number of companies making such products. That number has declined either through company consolidation or through a decision to no longer produce the generic drug.
“If there's only one manufacturer making a product, they have very much the right to increase the price if they would like to,” Purvis said. “That's something we have seen a lot of lately.”
Another factor has been a number of drug shortages – some due to interruptions in the supply line – that has limited supply and caused a spike in price.
Generics have long been considered a means of keeping the cost of drugs down by increasing competition of medications once the patent protection of those products expire.
Nearly two-thirds of older Americans use three or more prescription drugs a year, according to the report. Those who use three generic drugs on a chronic basis would have paid an average annual retail price of therapy of $849 in 2013, compared with more than $8,000 a year for three brand-name medications.
But growing evidence shows generics aren't offering significant cost savings like they did in the past. A New England Journal of Medicine (PDF) article last November told the case of albendazole, an antiparasitic medication that was first approved in 1996 and had a wholesale price of $5.92 per daily dose in 2010. By 2013, the same drug had a price of $119.58 per daily dose.
AARP's Purvis is concerned the trend in generic drug prices coupled with an increase in the number of high-cost, breakthrough drugs could adversely affect an elderly population that is expected to grow considerably over the next decade.
“We are talking about people who are heavy utilizers of prescription drugs,” she said. “If we're seeing reduced savings from prescription drugs at the same time as we're seeing an increase in prices and increasingly high launch prices for brand-name products, that's kind of a perfect storm for us. We're going to have people who are going to be unable to afford the prescription drugs they need to stay healthy.”