GAO, AARP reports slam 'disastrous' prescription drug prices

New reports from the Government Accountability Office and AARP are taking aim at increasing prescription drug prices and the potential burdens they pose to consumers and government programs.

The report released by the GAO on Friday found that expenditures on new medicines in Medicare's Part B program were limited to a few drugs, typically biologics, that were “costly to beneficiaries.” The 20 most costly drugs amounted to 92% of the expenditures on new medicines covered by Part B in 2013, the report found. That amount translates to 26% of the total expenditures for Part B drugs.

In its report, also released Nov. 20, the AARP, found that retail prices for more than 100 commonly used speciality drugs increased by almost 11% in 20134. The average annual cost for these drugs when used on a chronic basis exceeded $53,000 that same year — greater than the median U.S. household income of $52,250, and far exceeding the median $23,500 annual income of Medicare beneficiaries, the report's authors noted.

“These exorbitant prices and price increases can be financially disastrous, especially for people on fixed incomes,” wrote Debra Whitman, AARP's chief public officer, in a statement. “Americans cannot continue to absorb the astronomical costs associated with these products indefinitely.”