It’s no secret that prescription drug prices in this country are often exorbitantly high, an unfortunate fact for consumers who are reliant on a variety of medications to treat their health issues and may not be able to afford them. And there seems to be no end in sight to these rising prices. Consumers continuously pay more and more for prescription drugs as the list prices set by drug manufacturers continue to escalate as well.
A study published by JAMA Network Open revealed that from 2015 to 2017, the list price of 79 brand name drugs increased by 16 percent, while average out of pocket costs also rose by more than 3 percent. According to Dr. Benjamin Rome, an instructor of medicine at Harvard Medical School and a researcher at Brigham and Women’s Hospital in Boston who leads the team at JAMA Network Open, there is a growing problem in drug pricing policy. Consumers are subject to the cost of coinsurance and deductibles that are based on the list price of the drugs. He states that this pricing problem needs to get under control, and is up to Congress and the states to figure out a solution.
The overarching issue, largely responsible for creating this drug pricing problem is that drug manufacturers are for the most part unregulated in this country. This means that they can set a price for a drug as they see fit despite consumers’ inability to afford these exorbitant prices.
According to Rome there may be three solutions that can make a huge difference in helping mitigate this drug pricing issue. Legislation can be drafted that would introduce oversight to help potentially regulate drug pricing.
The other big problem contributing to this issue are rebates and their effect on escalating drug prices. Eliminating these rebates according to Rome would help ensure that there is a single price that both the insurance company and the consumer pay, therefore helping to stabilize drug pricing.
A third potential solution would involve insurance companies offering rebates to consumers as well. The problem is that when insurance companies get rebates, they save on drug prices but still charge the consumer a percentage of the list price. Therefore, if insurance companies passed on these rebates to consumers as well, consumers would benefit from saving on drug prices along with insurance companies.
Generic Drug Prices
Brand name drugs in the U.S. tend to be very expensive so the opportunity to take advantage of generic versions can help consumers save on drug prices. According to Dr. Jessica Nouvahandi co-founder and co-CEO and lead pharmacist at Honeybee Health, an online pharmacy that sells generic medications, the markup of brand name drug prices over that of generic versions is shockingly high. She stated that the disparity in price is so large, that even when a consumer has health insurance, they are often motivated to buy generic drugs because the drug prices are so much cheaper.
Yes, this drug pricing problem is complex with a lot of moving parts, and different parties' interests that need to be reconciled. However, according to Rome, the solution remains to be one that keeps the focus on the consumer. After all, it is the consumer who is bearing the brunt of these exorbitant drug costs. And when consumers are dependent on drug medications to treat health issues, but can’t afford them due to their continuous inflation, that is a problem.
What good are these great drugs that can help people overcome and treat their health issues if they can't afford them? Rome adds that it is vital that out of pocket drug prices must be taken into consideration as well, as the drug policy problems continue to be in contention.