Pills or Paycheck?

Rising prescription costs are forcing hard-working Americans to choose between life-saving medications and paying bills like electricity, phone, and other vital expenses.

Prescription drug prices have been a topic of discussion and controversy in the United States for decades. The high cost of prescription drugs can significantly impact patients, their families, and the healthcare system as a whole. This article will explore the factors contributing to the high cost of prescription drugs in America.

One of the primary reasons for the high cost of prescription drugs in the United States is the lack of government regulation around drug pricing. Unlike many other countries, the U.S. government does not have the authority to negotiate drug prices directly with pharmaceutical companies. Instead, drug manufacturers are free to set their own prices, often resulting in exorbitant costs for patients. As a result, the prices of many life-saving medications in the United States are much higher than in other countries.

A lack of competition in the pharmaceutical industry is also a contributing factor to high drug prices. In many instances, there may be only one or two drugs available to treat a particular condition, giving drug companies a monopoly on pricing. This lack of competition allows drug manufacturers to charge whatever they want, without fear of losing business to competitors. According to a study published in JAMA, drugs without competition had an average price increase of 10.5% compared to drugs with at least one competitor (Dave et al., 2017). The high cost of prescription drugs in the United States can significantly impact patients, particularly those who are uninsured or underinsured. Many patients are forced to make difficult choices between paying for necessary medications and other essentials like rent or food. This can lead to decreased adherence to medication regimens and poorer health outcomes. Insurers and employers also feel the impact, as high drug prices drive up the cost of healthcare coverage for everyone.

Another factor contributing to the insanely high cost of prescription drugs in America is the research and development (R&D) cost versus the profit margin for new medications. According to a report from the Tufts Center for the Study of Drug Development, it can cost upwards of $2.6 billion to bring a new drug to market (Kaitin, 2010). Instead of allocating appropriate funds towards R&D for new medications that could be cheaper, more effective alternatives to existing prescriptions, they funnel money into advertising existing products. This is to recoup the cost of R&D for each product from patients in the form of higher prices.

The cost of marketing and advertising also drives up the cost of medications in the United States. In 2019, pharmaceutical companies spent $6.1 billion on direct-to-consumer advertising (235% of R&D spend), an amount that has more than doubled in the past 20 years (Kaplan, 2020). Direct-to-consumer advertising is often aimed at convincing patients to ask their doctors for specific medications, even if they may not be the most effective or cost-efficient options. Not to mention the effort to market to the healthcare providers themselves. According to a 2019 study published in JAMA Network Open, pharmaceutical companies spent $20.3 billion on drug promotion to healthcare professionals in the United States in 2018 (Ventola, 2011). This includes advertising to doctors, sales representative visits, free drug samples, and other promotional activities. Pharmaceutical companies even sponsor medical conferences and provide promotional materials and continuing medical education courses to doctors in an effort to encourage prescribing their products. While some argue that such marketing activities can provide valuable information to doctors and help improve patient care, others argue that they can lead to overprescribing certain medications and further increase prescription costs.

One solution that has been proposed to address the high cost of prescription drugs in America is allowing the government to negotiate drug prices directly with pharmaceutical companies. This approach has been successful in other countries, such as Canada and the United Kingdom, where drug prices are much lower than in the United States (Gaffney et al., 2018). Another potential solution is increasing competition in the pharmaceutical industry through measures such as patent reform and generic drug promotion (Jiang et al., 2021).

Another bandage solution is broadening access to prescription assistance programs. A prescription assistance program is a type of program that helps individuals who are struggling to afford the cost of prescription medications. These programs can take many forms, but they generally provide financial assistance, such as coupons or discounts, to help individuals reduce the out-of-pocket costs of their medications. In some cases, these programs may also offer free or low-cost prescription drugs to those who qualify. Prescription assistance programs may be run by government agencies, non-profit organizations, or private companies, and they may focus on specific diseases or types of medication. These programs aim to help ensure everyone has access to the medications they need to maintain their health, regardless of their financial situation.

The Affordable Care Act is another temporary solution for rising prescription costs. A key component for applicants is CSR (Cost-Sharing Reduction). CSR provides financial assistance to individuals who purchase health insurance through the ACA marketplace and have income levels that fall below a certain threshold. This assistance helps lower out-of-pocket costs, particularly for medications. CSR is based on a sliding scale, meaning that the amount of financial assistance provided is based on an individual's income level and household size. CSR aims to help ensure that individuals have access to high-quality healthcare without facing significant financial barriers.

In conclusion, the high cost of prescription drugs in the United States has many contributing factors. While there is no easy solution, it is clear that more needs to be done to regulate drug pricing and increase competition in the pharmaceutical industry. By addressing these issues, we can help ensure that patients have access to the medications they need at a price they can afford. Until then, however, prescription assistance programs and low-cost healthcare options can aid those who need them.

References:

Kaitin, K. I. (2010). Deconstructing the drug development process: The new face of innovation. Clinical Pharmacology & Therapeutics, 87(3), 356-361.

Kaplan, S. (2020, March 13). Drugmakers’ push to hike prices on drugs for rare diseases is no rarity. The New York Times. https://www.nytimes.com/2020/03/13/health/rare-disease-drug-prices.html

Gaffney, A., Lexchin, J., & the ‘Getting to Zero’ Collaboration. (2018). Healing an ailing pharmaceutical system: Prescription for reform for United States and Canada. BMJ, 361, k1039.

Jiang, J. J., Patel, K. K., Ma, C., & Cohen, I. G. (2021). Beyond price controls: Policies to promote competition in pharmaceutical markets. The Journal of Law, Medicine & Ethics, 49(1_suppl), 83-96.

Dave, C. V., Kesselheim, A. S., Fox, E. R., Qiu, P., Hartzema, A. G., & Kauffman, B. G. (2017). High generic drug prices and market competition: A retrospective cohort study. Annals of Internal Medicine, 167(3), 145-151.