Unaffordable Medications

Medications that are considered unaffordable are any prescription drugs that have an unreasonably high out-of-pocket cost for the patient. Some medications are unaffordable because the price from the manufacturer is very high and the product is not covered by insurance. Others are unaffordable even with insurance coverage, as the amount the patient has to pay is very high. Medications are also unaffordable when the out-of-pocket cost is out of reach for a patient because they have limited income and/or are taking and paying for multiple prescriptions.

Experts say that prescription drugs, on average, are more expensive in the United States than elsewhere. This is in part because of differences in laws governing drug pricing. Unaffordable medications are a problem because they leave people with limited options for meeting health needs. The issue also raises questions of equity in health care because poor people may not receive the same level of care as others.

Background

A number of factors affect prescription drug prices. The cost and availability of raw material are factors as are special procedures or equipment needed for the manufacture, shipment, or storage of the medication. Another factor is the research and development (R&D) costs incurred by the company that creates the drug. Costs for developing, testing, and bringing a new drug to market are in the millions, with some studies showing average costs between one million and three billion dollars. Drug companies consider R&D costs and set a price based on recovering those funds.

When new drugs are marketed, they are usually covered by a government patent and given a brand name. This means that only the company that created the drug can sell it in any form for a set period of time. In the United States, patents are given for twenty years. This allows the company time to sell the drug to recover their costs without competition. Some drugs are also given exclusivity, which is another limitation on who can make similar drugs. After these expire, other companies can make variations of the original drug. These are usually referred to as generic drugs. Generally speaking, they have the same active ingredients as the brand name drug, but may have different inactive ingredients that make up the pill, tablet, etc.

Industry experts note that drug prices climbed noticeably beginning in the 1990s. They attribute this to several factors. One was the development of new technology, including the use of biologics, or pharmaceuticals that are derived from a natural instead of a lab-made source. Another was laws that allowed drug companies to advertise directly to consumers. This led people to directly request the newest drugs instead of relying on their physician to recommend products.

Overview

Many of the most expensive drugs—those costing tens of thousands of dollars per month—are for less common but often life-threatening conditions, including some cancers and blood diseases. These drugs can cost tens of thousands of dollars per month, putting their cost out of reach. These are often what people think about when unaffordable drugs are mentioned.

There are many other drugs that are used for more common conditions that can also be unaffordable. For example, in the early 2020s, Humira, used to treat Crohn’s disease and rheumatoid arthritis, and Enbrel, also used for rheumatoid arthritis, cost $9,000 or more per month. Cosentyx and Otezla, used for psoriasis, ranged between $6,000 and nearly $9.000 per month. These drugs are often subjected to special insurance rules such as prior authorization and higher copays that can make them difficult or impossible for patients to afford.

Another reason for unaffordable medications is skyrocketing prescription costs. For instance, research has indicated that the price for insulin—a life-sustaining drug for the treatment of diabetes—increased more than 50 percent between 2014 and 2019. Several reasons contributed to the cost increases, but the main one is similar to reasons that drug prices overall have increased. New methods of making the drugs have replaced older ways, and these usually come with higher costs. After diabetics and their advocates raised concerns about increasing prices, manufacturers and the government took steps to begin decreasing costs.

All these factors—supply and R&D costs, regulations, new technology, reduced competition due to patent rules, etc.—contribute to unaffordable medications. However, some experts say that it is really drug company policies and decisions that have the biggest impact on medication prices. They claim that drug companies charge what they think the market will bear. That means that a new drug for a condition like psoriasis, which can make people both physically and emotionally uncomfortable, might be priced higher just because they think a lot of people will be willing to pay more for a new treatment option. Drug companies also often raise the price of existing products when new ones are released as a way of minimizing the discrepancy between the prices. They also use a technique called evergreening to adjust the formula for an existing product just enough to qualify for a new patent as a previous patent expires.

Experts also point to the fact that many drugs are more expensive in the United States than in other countries. This is largely because other countries have laws in place that place limits on drug costs, while the United States has fewer such laws. Consumer advocates say that laws that would allow the government to cap the costs of new drugs and regulate price increases would help reduce the number of unaffordable medications.

Options

Experts say that people who are faced with unattainably high out-of-pocket expenses for prescription drugs should start by talking to their doctor. They should do this before resorting to other options such as cutting pills, skipping doses, or not taking the medication at all. In some cases, a less expensive alternative may be available or the physician may be able to appeal to an insurer to cover a medication.

Another option is to consult with a pharmacist who might also be able to recommend alternatives to discuss with a physician. Both physicians and pharmacists may be able to help with information about programs such as copay cards that help pay for expensive drugs or assist with out-of-pocket costs. Shopping around to different pharmacies can also help, as drug prices have been found to vary widely in different locations, between chain stores and independent pharmacies. The companies that make some high cost drugs offer their own programs as well, so contacting the company may provide help.

Researching options online is another possible way to reduce medication costs. For example, in some cases, drugs are available in multiple forms. While the drug taken at home may be too expensive, a form that is administered in a medical facility may be covered at a lower out-of-pocket cost.

Bibliography

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“Frequently Asked Questions on Patents and Exclusivity.” US Food and Drug Administration, 2 May 2020, www.fda.gov/drugs/development-approval-process-drugs/frequently-asked-questions-patents-and-exclusivity. Accessed 14 June 2023.

“If You Can’t Afford Your Medication, Have a Conversation with Your Doctor Before Stopping It or Taking Less Than Prescribed.” Norton Healthcare, 19 Nov. 2021, nortonhealthcare.com/news/cant-afford-medication/. Accessed 14 June 2023.

Kolata, Gina and Francesca Paris. “The Medicine Is a Miracle, but Only if You Can Afford It.” New York Times, 7 Feb. 2023, www.nytimes.com/2023/02/07/health/medicine-insurance-payments.html. Accessed 14 June 2023.

LaFee, Scott and Nicole Mlynaryk. “Why Are Prescription Drugs So Expensive? It’s Not Necessarily High R&D, New Study Shows.” University of California, 29 Sept. 2022, www.universityofcalifornia.edu/news/why-are-prescription-drugs-so-expensive-its-not-necessarily-high-rd-new-study-shows. Accessed 14 June 2023.

Smith, Camillo Hannibal. “Why Are Prescription Drugs More Expensive in the U.S. Than in Other Countries?” GoodRx, 19 Oct. 2022, www.goodrx.com/healthcare-access/drug-cost-and-savings/why-are-prescription-drugs-more-expensive-in-the-us-than-in-other-countries. Accessed 14 June 2023.

Wells, Anna. “The Top 10 Most Expensive Popular Brand-Name Drugs in the U.S. (and How to Save).” GoodRx, 14 July 2021, www.goodrx.com/healthcare-access/drug-cost-and-savings/top-10-most-expensive-popular-brand-name-drugs-us-how-to-save. Accessed 14 June 2023.

“Why Did U.S. Drug Costs Skyrocket in the 1990s?” Harvard T.H. Chan School of Medicine, 2023, www.hsph.harvard.edu/news/hsph-in-the-news/why-did-u-s-drug-costs-skyrocket-in-the-1990s/. Accessed 14 June 2023.