Our Prescriptions Cost Too Much

Prescription drug prices often pose a hurdle for Americans. Aside from the battle over which ones are covered by insurers, we’re all facing the ever-rising cost. How can anyone afford a necessary treatment if the price keeps going up — especially for those living on a fixed income or a tight budget?

The latest AARP Rx Price Watch Report just out offers some startling numbers. More than 600 of the most widely used prescription drugs by older adults had a price increase at a rate six times higher than the inflation rate.

Leigh Purvis, who oversees health services research for AARP, told LifeZette why prices are surging: “There’s nothing to stop it from happening.”

The report tracked prices from December 31, 2005, to December 31, 2013. In 2013, the average annual increase in retail prices for drugs on the list — many widely used by Medicare beneficiaries — was 9.4 percent. The rate of inflation for that year was 1.5 percent. For a consumer who takes a prescription drug on a regular basis, this translates into an average annual cost of therapy of about $11,800 in 2013, the report noted. In 2006, the annual cost was about $4,300.

Brand name drugs went up 12.9 percent, while specialty drugs increased 10.6 percent. (Specialty drugs require special handling, administration or monitoring. They are often used to treat complex and chronic conditions such as rheumatoid arthritis, hepatitis C or multiple sclerosis.)

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AARP noted the acceleration in prescription drug prices “could be an indication that we can no longer rely on lower-priced generics to counterbalance the price trends seen in the brand name and specialty prescription drug markets.”

A recent CVS Health report found drug spending on its plans went up just 5 percent last year, compared to an 11.8 percent hike in 2014. An Express Scripts representative told LifeZette its annual report isn’t out yet.

Express Script’s latest Drug Trend Report, however, says prescription drug spending went up 13.1 percent in 2014 — the largest annual increase since 2003. The surge was mostly driven by a 30.9 spending increase in specialty medications. These medications account for only 1 percent of all prescriptions in the U.S., but they represented 31.8 percent of all drug spending in 2014, the Express Scripts report stated.

Deductibles Pose Challenges, Too
Another factor making drug prices rise is higher deductibles. Doug Hirsch, co-founder and co-CEO of GoodRx, said there are more plans, but they are only available with a high deductible. So people are responsible for more of their own prescription costs.

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He said the percentage of companies offering high deductible plans increased from 18 percent last year to 25 percent this year. And a heads-up to all employees: A 2014 PwC survey found that 44 percent of employers are looking to switch to plans with higher deductibles.

Generic drug costs have helped some drugs become more affordable; but unless there are multiple companies making a generic, prices are not pushed down. Competition is a good solution to lowering costs in addition to legislative action, Purvis said.

“I think it’s incredibly important for patients to have conversations with their doctors and pharmacists to make sure there aren’t any (drugs) that can be offered cheaper,” Purvis said. She said many drug manufacturers have patient assistance programs, which can also lower costs.

Though prices, on the whole, are on the rise, Purvis said that not all hope is lost when it comes to lowering prescription prices.

“This is something that’s not insurmountable,” she added. The issue is one the presidential candidates are also pursuing this election year. Many are keeping a critical eye on price negotiations amid frustration over why the U.S. pays exponentially more for many prescription drugs when our foreign counterparts pay just a fraction of the cost.