Even with health insurance, 66% of Americans think they pay too much for prescription drugs, and 96% say they’d switch (with physician approval) prescriptions or pharmacies to save money, according to a new survey by the doctor-founded healthcare IT company Scripta Insights.
Coupled with a fresh analysis from the American Society of Health-System Pharmacists (ASHP) predicting a "dramatic" effect from pandemic-influenced drug spending both this year and into 2022, it’s no wonder that finding ways to save on medications is a growing financial priority for many consumers.
- The rise in prescription drug prices is likely to significantly outpace inflation this year and into 2022, according to new research.
- The coronavirus pandemic will continue to be a major factor in increased drug spending.
- Proposals to give the federal government more power to negotiate drug prices are in the legislative pipeline.
Drug Costs Continue to Outpace Inflation
For people with group health insurance plans, the price of most prescription drugs is expected to rise 7.3% this year, and the cost of specialty drugs (those that may require special handling and are often given by injection or infusion) could increase by 11.5%, according to the 2021 Segal Health Plan Cost Trend Survey. Segal notes these figures represent a rate that continues to significantly outpace inflation and average wage increases.
While the pandemic heavily influenced U.S. spending for prescription drugs in 2020, shifts in care related to it will continue to be a significant driver of drug spending among health care providers this year and next, the report says.
“Hospital and health-system pharmacy leaders should expect to continue suffering from drug expenditure whiplash in 2021 and beyond as they manage the implications from COVID-19, including the commercial availability of new high-cost drug therapies," says the report’s lead author, Eric Tichy, PharmD, MBA, division chair of supply chain management at Mayo Clinic in Rochester, Minn.
Patients who delayed preventative care during the pandemic and now need more acute care as a result are also likely to spur a rise in prescription drug spending, the report says.
Is Prescription Price Reform on the Way?
Against this backdrop is the fact that Americans spend more on prescription and over-the-counter (OTC) medicines than any other nation measured by the Organisation for Economic Co-operation and Development—$1,229 a year per capita, according to the latest data available.
While private health insurers and government programs like Medicare and Medicaid share some of the bill for patient medications, higher drug costs are also passed on to consumers through the insurance premiums they pay for health coverage, as well as out-of-pocket copays and deductibles.
Recently introduced drug-pricing reform measures, meanwhile, seek to allow the federal government to negotiate with pharmaceutical companies for lower prices on drugs. While some Democratic lawmakers hoped to include such a provision in President Biden's forthcoming American Families Plan (expected the week of April 26), indications are that the White House may pursue the issue as a separate matter, according to media reports at presstime.
Some prescriptions are cheaper if you bypass your insurance and simply pay the cash price.
What Consumers Can Do to Save
To help relieve the pain of prescription drug costs, health care advocates contacted by Investopedia recommend reviewing—or redoubling—these strategies now.
Compare savings with and without insurance. Patients may not always think about bypassing their health insurance coverage, but in some cases doing so could mean lower prices. According to the Scripta survey, 57% of consumers polled say they now ask before they pay at the pharmacy counter if the cash price is less than the price through their insurance. In addition, at sites such as GoodRx.com, you can compare medication prices at pharmacies in your ZIP code and get coupons or prescription discount cards. Some pharmacies offer their own discount programs, too.
Consider generics over brand names. Nine in 10 prescriptions filled in the U.S. today are for generic drugs, which offer an average of 39% to 95% savings over their brand-name counterparts, according to the Food and Drug Administration. What’s more, some health plans have a zero co-pay for certain generic equivalents.
Tap a health savings account (HSA). If you have a high-deductible health plan, you can contribute pretax dollars to a health savings account and withdraw the funds tax-free to help pay for prescriptions. Plus, many OTC medications and nonprescription health products are also eligible expenses under a rule change included in the Coronavirus Aid, Relief and Economic Security (CARES) Act last year.
Try mail-order and larger quantities. Mail-order pharmacy programs can buy in bulk from drug manufacturers, so they often deliver cost savings on medicines you must take regularly. Similarly, 90-day supplies are typically cheaper per dose than 30-day amounts.