Specialty drug prices are soaring and easily outpacing by 4-1/2 times, the monthly social security payments received by senior citizens.
Specialty drugs treat complex, chronic conditions such as cancer, multiple sclerosis, and rheumatoid arthritis. In 2017, retail prices for 97 of those widely used medications increased by an average of 7 percent. This is more than three times the overall rate of inflation, according a recent AARP report. Incredibly, the average annual price for one of these specialty medications is approximately $80,000.
Specialty Drug Price: Why So Expensive?
Higher prescription drug prices affect all Americans, and especially senior citizens. If current price trends continue for these specialty drugs, seniors will be unable to afford them.
Currently, although most Americans have health insurance, higher prescription drug prices, and in particular, specialty drugs, has the greatest impact on seniors. They wind up paying higher premiums and higher deductibles.
Patients have either a flat copay as their portion of prescription drug costs or coinsurance. In this scenario, they pay a percentage of the retail price of the medication. But, for the special medications that seniors must have, it typically requires co-insurance that costs thousands of dollars. For example, Medicare Part D coinsurance can get as high as 33 percent.
Moreover, the annual $80,000 price tag for a specialty medicine is more than 3 times the median income for Medicare beneficiaries ($26,2000. And, it’s $20,000 more than the median income for all U.S. households ($60,336).
The single highest retail price increase in 2017 for a specialty drug was for Revatio, which treats pulmonary hypertension. The second highest retail price increase was for the cancer treatment Revlimid, which increased by an average of 21.4 percent in 2017. The annual cost of Revlimid went from almost $204,000 in 2016 to nearly $248,000 in 2017.
These soaring costs are not sustainable. And therefore, a viable solution will come from either the States or the Congress to pass legislation.