We’ve all been there or have a friend or loved one who has been prescribed a drug to deal with a medical condition only to suffer a serious case of sticker shock at the pharmacy! Even though millions more Americans have medical coverage through the Affordable Care Act or their employer's health plan, everyone is dealing with the continued rise of prescription drug costs. Two things everyone wants to know are why are pharma costs so high, and what is being done to address it?
Most analysts will argue that runaway drug prices are a direct result of favorable legislation and government regulations that were promoted through the efforts of pharmaceutical industry lobbyists. For a long time, drug manufacturers have taken advantage of regulations that allow them to charge exorbitant prices for drugs that they have exclusive rights to. These particular drugs are priced on principles of market exclusivity, rather than fair-market pricing adjusted through competition. The regulations allowing this monopolistic behavior was originally intended to allow manufacturers to recoup their initial investments in research and development of new breakthrough medications.
Another factor contributing to drug pricing is related to our antiquated Medicare and Medicaid systems. These insurance programs cover one out of every three Americans. One would think that with that kind of volume and buying power, prices could be negotiated to manageable levels. Good thought, just not a reality. Federal legislation prohibits Medicare and Medicaid from negotiating costs and are forced to pay whatever the drug manufacturers charge.
Tackling the rising costs of prescription drugs is proving to be a more difficult challenge for lawmakers. American voters overwhelming support (over 72%) legislation or regulations to help bring pharmaceutical costs down, but getting Congress to agree on how to do that is like herding cats. Legislation has been introduced that will force drug companies to be more transparent in justifying their pricing. Drug makers claim that they have spent billions of dollars to bring a new drug to market, but are not asked to verify or even categorize those costs for analysis. In fact, there is currently no way to determine how much a pharmaceutical company is spending on Research & Development overall. Analysts believe that cost transparency is a start.
Another bill introduced recently would allow wholesalers, pharmacies, and individuals to import prescription drugs from Canada. The sponsors of the bill are looking to influence pricing in the United States by bringing them in from other countries that may have better cost controls. The challenge to be overcome will be how to ensure that counterfeit or unsafe drugs are not making their way into the pharmaceutical supply chain.
The solution that may prove to have the greatest impact on drug prices is through reforming Medicare and Medicaid, allowing them to negotiate prices for the millions of individuals who are covered by government health insurance. Other ways that we as consumers can protect against paying higher prices for prescriptions is through the power of technology. There are many apps on the market that allow individuals to shop around and find the best prices.
GoodRx – A website that also has a mobile app for your smartphone is a free comparison drug shopping site called GoodRx. Compares pricing from more than 70,000 pharmacies around the country and it even has coupons!
LowestMed – This mobile app allows consumers to search and compare prices at leading discount pharmacies based on your phone’s GPS location. LowestMed.com is available for Android and iPhones.
Other discount apps include Prescription Saver for your Apple device allowing users to shop around for discounts at local pharmacies and also includes a free discount card. Another, called OTC Plus was designed by board-certified physicians and helps consumers select the best over-the-counter medicines for their particular symptoms. The app also sends coupons to your mobile device and also provides guidance on reading drug labels.
Clearly, prescription drug prices will be a hot topic for the next several years. Keep checking this site for updates on this important issue and many others that impact your career as a healthcare professional. Please share your thoughts in the comment section below or join us on our Facebook page.