RISING RX PRICES AND OLDER ARIZONANS Brendon Blake – Director

RISING RX PRICES AND OLDER ARIZONANS Brendon Blake – Director of Advocacy, AARP Arizona

Introduction Introduction to Rx Prices in America Trends in Rx Prices Impact on Our Older Population Potential Solutions, AARP’s Efforts, & Pitfalls *Disclaimer* 2

Introduction to Rx Prices in America The U.S. Pays the most for Rx drugs around the globe Researchers have deemed a term for it: American Premium The international community pays less than half (41%) for the same drugs as U.S. consumers As a result, companies are able to pay their global R&D budget off of the backs of American consumers and then some https://www.healthaffairs.org/do/10.1377/hblog20170307.059036/full/ 3

Introduction to Rx Prices in America (Con’t) Of the 210 new drugs introduced from 2010-2016, each one had received federal funding from the NIH Other Industries in Play: – Pharmacy Benefit Managers (PBMs) – Insurance Companies https://www.pnas.org/content/115/10/2329 4

Introduction to Rx Prices in America (Con’t) Common Misconception: Older drugs are cheaper Cheaper, generic drugs are not always created for a couple of reasons: – Pay-for-Delay Agreements – Biologics: Changes to the drug’s formula Insulin https://www.pnas.org/content/115/10/2329 5

Trends in Rx Pricing Constant increases in brand name medications since before the pandemic and vastly outpace inflation – Between 2015 and 2019, the Top 50 Medicare Part D drugs saw an increase of 38 Billion above inflation – We have already seen drugs outpace inflation in 2022 Before the pandemic, we saw the cost of generics actually go down https://www.aarp.org/politics-society/advocacy/info-2019/drug-price-report-generics.html https://www.aarp.org/ppi/info-2021/drug-price-increases-that-exceed-inflation-are-costing-medicare.html https://blog.aarp.org/thinking-policy/prices-for-most-top-medicare-part-d-drugs-have-already-increased-in-2022 6

Impact on Older Arizonans Older folks across the country take an average of 4.5 medications In 2016, the average Medicare recipient paid 5,460 in out of pocket expenses – This will continue to go up with the cost of drugs continuing to rise The average social security check in Arizona is 1,550/month https://www.aarp.org/politics-society/advocacy/info-2019/drug-price-report-generics.html https://www.kff.org/report-section/how-much-do-medicare-beneficiaries-spend-out-of-pocket-on-health-care-methodology/ 7

Impact on Older Arizonans This forces people to make difficult choices when it comes to their other financial matters, especially with inflation this year Seniors are the fastest group experiencing homeless, most of whom are doing so for the first time The buses of people that go to Mexico/Canada to buy drugs https://www.aarp.org/politics-society/advocacy/info-2019/drug-price-report-generics.html https://www.kff.org/report-section/how-much-do-medicare-beneficiaries-spend-out-of-pocket-on-health-care-methodology/ 8

Potential Solutions & AARP’s Efforts AARP Campaign – Stop Rx Greed Federal: – Allow Medicare to Negotiate for Lower Rx Prices – Cap Out of Pocket Costs – End Pay-for-Delay Agreements – Inflation Cap State: – Implement Drug Affordability Boards to Negotiate for State plans 9

Pitfalls Pitfalls – Cost Shifting Measures – Transparency Concerns Solution: Lower the Actual cost of the drug 10

QUESTIONS?