Rx Costs Outpaced NYers’ Income by 55%; Big Pharma Spent More on Stock Buybacks & Dividends than R&D: New Data
AARP: Congress Should Allow Medicare to Negotiate Lower Drug Prices
ALBANY, N.Y. – The cost of prescription drug treatment grew 55% faster than the average New Yorker’s income from 2015 to 2019, while Big Pharma spent more on stock buybacks and dividends than on research and development from 2008 to 2018, three new AARP fact sheets show.
While New York residents’ income rose by 16.9% on average from 2015 to 2019, the average annual cost of prescription drug treatment jumped by 26.3%, the fact sheets show.
The pharmaceutical industry spent nearly $6.6 billion on advertising and over $161 million on lobbying in 2020.
And the federal government continues to play an outsized role in prescription drug R&D. In fact, most of the important new drugs introduced over the past 60 years were developed with the aid of research conducted in the public sector.
Meanwhile, AARP’s most recent Rx Price Watch Report found that the prices of 260 widely used brand-name medications rose more than twice as fast as general inflation in 2020 – in the middle of a global pandemic and financial downturn.
Americans pay more than three times what people in other countries pay for the same medicines. Too many consumers have to choose between filling life-saving prescriptions and paying rent, buying food and other critical essentials.
Prices can add up, as the average older American takes four to five prescription drugs per month, typically on a chronic basis.
“Congress should put a stop to these spiraling price increases, starting by finally giving Medicare authority to negotiate with pharmaceutical companies for lower prices,” said AARP New York State Director Beth Finkel. “The Veterans Administration does so, paying roughly half as much for brand name prescription drugs than Medicare Part D. Big Pharma spent more on stock buybacks and dividends than on research and development for a decade; the notion that drug makers need to charge Americans three times what residents in other countries pay for the same drugs to support innovation simply doesn’t hold water.”
Medicare Part D spent more than $180 billion on prescription drugs in 2019. Giving the program the power to negotiate would help reduce taxpayer spending and save Medicare Part D beneficiaries $117 billion over the next 10 years.
An AARP survey shows that 87% of registered voters 50 plus support allowing Medicare to negotiate with drug companies. Right now, the program is largely stuck paying whatever price pharmaceutical companies demand – leaving the government on the hook for sky-high costs that increase every year.
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AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age. With nearly 38 million members and offices in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP works to strengthen communities and advocate for what matters most to families with a focus on health security, financial stability and personal fulfillment. AARP also works for individuals in the marketplace by sparking new solutions and allowing carefully chosen, high-quality products and services to carry the AARP name. As a trusted source for news and information, AARP produces the world’s largest circulation publications, AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org or follow @AARP and @AARPadvocates on social media.
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FOR IMMEDIATE RELEASE:
September 17, 2021
CONTACT:
Amanda Davis, 202-434-2560, [email protected], @AARPMedia
AARP Launches $4M Dollar Ad Buy Calling Out Big Pharma’s Lies and Scare Tactics on Medicare Negotiation
WASHINGTON—AARP has launched a full-scale campaign, including a $4 million ad buy, pushing back on false claims from the pharmaceutical industry that reforms would limit Americans’ access to medicines. AARP has called for fair drug prices for years and is urging Congress to pass legislation that would allow Medicare to negotiate drug prices, put a cap on out-of-pocket costs that older adults pay for their prescription drugs and impose penalties on drug companies that raise prices faster than the rate of inflation.
AARP’s new ad points out that Americans’ tax dollars subsidize new drug development even as Big Pharma charges Americans dramatically higher drug prices. The ad goes on to urge Congress to “stop the Big Pharma scam. Let Medicare negotiate drug prices.” Beginning tomorrow, it will air nationally on MSNBC and CNN; and in the DC metro area on the Sunday political shows and local radio stations, as well as on digital platforms including the New York Times, Washington Post, CNN, and Politico. In addition to paid advertising, AARP members will take part in a week of grassroots action beginning September 20. A social media campaign calling for older adults to #ShowYourReceipts has led thousands to share their monthly medication costs with AARP, with their monthly “bills” now running over $11 million.
“Americans are fed up with paying the highest prices in the world for prescription drugs,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer. “Our 38 million members are watching and they are counting on their members of Congress to do what’s right and vote to let Medicare negotiate for lower drug prices.”
Congress is currently debating measures to rein in the cost of prescription drugs, and the House Ways & Means Committee advanced legislation this week that includes many of AARP’s priorities on fair drug prices.
A recent AARP survey of voters found that 80% agreed or strongly agreed that drug prices could be lowered without harming innovation of new medicines. Strong majorities of voters, regardless of political affiliation, want Congress to act on the issue this year, with 70% saying it is very important. The survey also found that 87% of voters support allowing Medicare to negotiate prescription drug prices. More information about AARP’s Fair Drug Prices campaign can be found at aarp.org/rx.
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About AARP
AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members, AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation’s largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org, www.aarp.org/espanol or follow @AARP, @AARPenEspanol and @AARPadvocates, @AliadosAdelante on social media.
