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AARP Report: Specialty Drug Prices Soar to Nearly $79,000 per Year

“If these trends continue, older Americans will be unable to afford the specialty prescription drugs that they need, leading to poorer health outcomes and higher health care costs in the future,” says the report, authored by Leigh Purvis, director of health services research at the AARP Public Policy Institute, and Stephen W. Schondelmeyer of the University of Minnesota’s PRIME Institute.

Source: AARP/Health Affairs, July 2018

The report on 2017 specialty drug prices is the latest in a series of AARP studies tracking the changes in prescription drug price changes that began in 2004. These findings come as AARP continues its Stop Rx Greed campaign, which calls on state and federal lawmakers to lower prescription drug prices.

Seven Ways to Bend the Specialty Rx Cost Trend:

1) Carve-Out Specialty Pharmacy
2) Carve-Out Manufacturer Revenue
3) Institute a Partial-Fill Program
4) Negotiate Better Contracts
5) Outsource Prior Authorization
6) Restrict Access
7) Address Poor Medication Adherence 

Patients generally have either a flat copay as their portion of prescription drug costs or coinsurance, where they pay a percentage of the retail price of the medication. Out-of-pocket costs for specialty drugs, Purvis says, typically require coinsurance and that can mean thousands of dollars. “Medicare Part D coinsurance can get as high as 33 percent,” Purvis adds.

The $78,781 annual average cost for one of these medicines is more than three times the median income for Medicare beneficiaries ($26,200), the report found, and $20,000 more than the median income for all U.S. households ($60,336). “As you look at these prices and they are higher than what people make in a year, how in any way, shape or form is that affordable?” Purvis says.

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Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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