Why Are Prescription Medications So Expensive? Ways to Fight Rising Costs

According to recent studies, prescription drugs are more expensive in the United States than anywhere else in the world. Public perception of the cost of prescription drugs seems to buoy this idea.?

The question that remains is: “Why?”?

Americans spend an average of $1,200 a year on prescription medications. Those with chronic illnesses such as diabetes or cancer may quadruple those costs (and then some).?

Pharmaceutical companies have had a variety of answers for why prices have risen and remained so high. Some have blamed innovation, claiming it takes money to keep rolling out new treatments. However, a study by Health Affairs does not exactly support that assertion.?

Rising Costs on Available Drugs?

The Health Affairs study showed that, more often than not, prescription costs have increased due to pharmaceutical companies rising prices on existing drugs. One only has to look at the cost of insulin to see this price-gouging in action.?

Relatively unchanged in the last few decades, a vial of insulin costs pharmaceutical companies about $10 to produce. The federal list price, on the other hand, runs roughly 30 times that cost . Three major companies control the flow of insulin globally — Eli Lilly, Novo Nordisk, and Sanofi. While we have better, more improved insulin available today than what was available in the 80s or early 90s, the companies have not come up with anything better than insulin to manage diabetes. Yet, they have still raised the prices to astronomic levels over the past two decades. In the 1990s, Medicaid costs for insulin ranged from $2.00 to $4.00 per unit. Costs have tripled since then.?

Some may look at the case of insulin cost increases and assume that pharmaceutical companies raise the price of existing drugs simply because they can, and they wouldn’t be far off. The rising costs of brand-name medicines have outpaced inflation year after year.?

Though the companies may blame research and development (R&D) for price hikes, the truth is that R&D only accounts for 17% of most pharmaceutical companies’ total spending. Once a drug is brought to the market, it needs very little in terms of research or further development. It is more apt that lack of competition and the regulatory practices in the United States contribute far more to the rising costs of prescriptions.?

The rising costs of prescription medications lead people to skip and ration medications. However, this can result in serious medical complications or even death.?

Fighting Rising Costs?

So, what can be done to fight the continually-rising costs of prescription drugs? It’s an uphill battle that will need to be approached from many sides to triumph. Big Pharma has pumped millions of dollars into combating prescription drug price negotiation , and they are a formidable force.?

Nevertheless, consumers have options. The rising cost of prescriptions is not an issue that will continue to be swept under the proverbial rug.?

Discount Cards/Codes

Many insurance companies, drug manufacturers, pharmacies, and providers have their own discount cards that consumers can apply to specific drugs. The most well-known of these is probably GoodRX , which offers users discounts on a number of prescriptions. Consumers should always ask their providers or pharmacists if they are aware of any discount cards or services.?

Online & Home Delivery Pharmacies

Online pharmacies that buy direct from the manufacturer and offer home delivery can save consumers money. Many online or digital pharmacies can also provide 90-day supplies on some of the most common prescription medications, allowing consumers to save more money.

Health Savings Accounts

Many employers offer their employees health savings accounts, which allow people to save money for healthcare needs. These savings accounts can be used to pay for prescriptions.?

Research Generic Options

Some insurance companies will only cover brand names, while others will only cover generic options. Consumers must do their due diligence in researching what options are covered by their insurance companies or — if they do not have coverage — which drugs have a generic alternative available.?

Until federal list prices for medications are lowered across the board, consumers will have to seek out ways to access prescriptions at an affordable price. Currently, several bills are in various stages of review with the federal government that seek to lower prescription drug pricing, including the Elijah E. Cummings Lower Drug Costs Now Act and parts of the recently passed Inflation Reduction Act .?

Even so, it may be some time before the United States can expect to see the same kind of prescription affordability as some of our industrialized peer nations. In the meantime, the above mentioned options can help ease the sting of high prescription drug prices.?