High Cost of Prescription Drugs - More than Just Prices

High Cost of Prescription Drugs – More than Just Prices

A new study has found that it is more than prices that are high when it comes to so many prescription drugs.  According to Modern Healthcare newsletter, “A $10.40 increase in out-of-pocket costs per prescription was associated with a 22.6% drop in consumption and a 32.7% increase in monthly mortality rates, an analysis of more than 358,000 relatively healthy 65-year-old Medicare beneficiaries found.”

"When we raise prices, they mess with people's ability to make good decisions about their health," said Ziad Obermeyer, co-author of the study and associate professor of health policy and management at the University of California at Berkeley. "Those decisions lead to more people dying—health costs need to be priced into these cost-sharing policies."

The study, which was conducted by the National Bureau of Economic Research, found that a Medicare beneficiary paid 25% of the price of their branded drugs until they reached $2,510 in total annual out-of-pocket spending. The patient then fell into the “donut hole” and had to pay for the full cost until they hit $5,726, after which they were responsible for a 5% copay.

As a result, the highest-risk patients were not filling their medication after prices jumped. Those most vulnerable to a heart attack and stroke cut back more on statins and anti-hypertensives than lower-risk patients—irrespective of socioeconomic status.

The riskiest one-third of patients were 280.6% more likely to drop cardiovascular drugs than the bottom two-thirds; there were similar results for those at high risk of diabetic and pulmonary complications.

Rather than cutting back on one or two drugs, there was a large group that stopped filling most if not all their prescriptions as copays went up.

And drug list prices continue to increase every year. As health insurers and employers pay more, they often pass those costs to consumers in the form of higher premiums, deductibles, and copayments.

Pharmaceutical manufacturers hiked the list price of a record 832 drugs last month —nearly 200 more than January 2020 and the highest since at least 2014. All but 10 were branded drugs and 175 of those were specialty drugs, according to the report.

List prices increased by an average 4.6% in January, which is the largest amount in years.  Most list price increases end up trickling down to patients in the form of higher cash and net prices, which is especially important for those who have high deductibles and the uninsured.

These price increases are very likely to block some patients from affording their medication, following instructions for taking the drugs, result in higher costs for treatment in the future because of not taking the prescriptions as directed, and cause higher incidents of additional health issues and death rates.

Half of the medications that saw price hikes followed price increases in 2019 and 2020, according to the report.

Fighting for legislation to lower the costs of prescription drugs is one of TSCL’s very top priorities this year and we will keep you informed as things progress.