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Generic medicine costs rise sharply

AARP survey forecasts shift

TRENTON, N.J. — Reversing a long-term trend, prices for more than one in four generic medicines widely used by older Americans increased in 2013, some very sharply, according to a survey by AARP.

Generic drug prices on average are still falling, but the increases for certain classes of drugs may be a sign of more to come, the advocacy group says, because industry consolidation is reducing competition, manufacturing quality problems are causing shortages and the number of blockbuster brand-name medicines going off patent has fallen since a huge surge a few years ago.

“This is the beginning of a shift,” said Leigh Purvis, director of health services research in AARP’s Public Policy Institute.

About six of every seven prescriptions filled in the U.S. today are for generic medicines, as consumers, employers and health plans increasingly turn to generics to save money. At the same time, many insurance plans increasingly shift more of the medicine bill onto patients, through higher copayments and bigger deductibles.

AARP’s survey looked at price trends for 280 generic drugs commonly taken by Americans ages 50 and older — about 110 million people.

Roughly two-thirds of them take at least three generic drugs regularly. Many also take brand-name medicines. And the newest brand-name drugs for cancer, hepatitis C and some other conditions more common among older people cost around $100,000 for a year or course of treatment.

“What we used to get from generics in the way of savings is going away at the same time that the prices of brand-name drugs are extremely high, and they’re going even higher, stratospheric,” Purvis said.

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