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Drug Prices Rising Faster Than Inflation

Part D plans as cost increases get passed along to members. She said that even though these plans purchase drugs at below-retail cost, there was no legal requirement that they pass the savings on to their members.

To ease the rising drug costs, AARP is supporting a bill in Congress to allow Americans to import drugs from Canada and other western nations.

David Sloane, AARP's senior managing director of government relations said, "We've never been this close to getting meaningful relief from rising prescription drug costs. For the first time, a bill that would allow safe and legal importation of medications has widespread bipartisan support."

Sharon Treat is executive director of the National Legislative Association on Prescription Drug Prices said the price increases aren't justifiable, economically or socially.

She said, "I think it's outrageous. The drugs that they sell the most of are the ones that have the biggest increases, which imply it has nothing to do with normal economic theory. People are being ripped off, our government is being ripped off, and people's health is being affected as a result."

According to Treat the Medicare Part D prescription drug plan for seniors that took effect Jan. 1 has done nothing by way of reducing prices. ‘In fact,’ she said ‘prices have now zoomed up more than they had before Part D was passed.’

She also noted that under Part D, the federal government cannot negotiate drug costs. Treat said, "The government has ceded over to the private sector all the negotiation and has divided up the pool of enrollees, which reduces purchasing power. The end result is that there is no strong push to reduce prices."
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