Cost gap widens between brand-name, generic drugs


The average cost of a brand-name drug was 18.6 times higher than its generic equivalent in 2017, and the size of that gap has more than tripled since 2013, according to a report from the AARP Public Policy Institute.

Average annual cost of therapy: Generics vs. brand-name drugs

In 2017, the average retail cost of 260 generic drugs widely used by older adults for chronic conditions was $365 for a year of therapy, compared with $6,798 for brand-name drugs. In 2013, that same year of therapy with an average brand-name drug ($4,308) was only 5.7 times more expensive than the generic ($751), the AARP wrote in the report, produced in collaboration with the PRIME Institute at the University of Minnesota, Minneapolis.

“Generics account for nearly 9 out of every 10 prescriptions filled in the U.S. but represent less than a quarter of the country’s drug spending. These results highlight the importance of eliminating anticompetitive behavior by brand-name drug companies so that we get more lower-priced generic drugs on the market,” Debra Whitman, executive vice president and chief public policy officer at AARP, said in a written statement.

The average retail cost of a larger group of 390 generic drugs used by older adults fell by 9.3% from 2016 to 2017, compared with an increase of 8.4% for a group of 267 brand-name prescription drugs. Over that same time, the general inflation rate rose by 2.1%, the AARP noted.

The AARP’s annual Rx Price Watch Report is based on data from the Truven Health MarketScan research databases.

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