Happy New Year! Your Drug Prices Just Went Up!

“Drug prices are out of control, and Big Pharma continues to raise the prices for all Americans……….Not only does that mean higher prices at the pharmacy counter, it also means higher premiums and other healthcare costs for everyone.”

SOURCE: Healthline.com

The Price of 500 Prescription Drugs Have Gone Up This Year: What to Know

  • The prices of almost 500 prescription drugs have already risen since Jan. 1.
  • The average price hike is about 5 percent.
  • Among the drug prices that have increased are Cotempla XR, Eliquis, Truvada, and Humira.
  • Experts say the price increases affect insurers more than consumers. They also urge legislators to take action to help lower drug costs.

Action to reduce prescription drug prices may be on the back burner on Capitol Hill amid discussions about impeachment and Iran.

But the White House and many legislators still have hopes of some action to reduce prices in 2020.

President Trump proposed new rules aimed at that goal in mid-December.

However, prices for hundreds of prescription drugs have shot up.

According to GoodRx, a startup that tracks prescription drug prices and helps consumers find discounts, the prices of more than 560 medications have gone up since Dec. 31.

On average, the increase has been about 5 percent.

Among the specific drugs with already raised prices are Eliquis (used to reduce risk of stroke in people with an irregular heartbeat), Truvada (an antiretroviral used to prevent HIV transmission), and Humira (used to treat some types of arthritis).

The drug with the biggest price hike was Marplan, which is used to treat depression, at 14 percent.

The second highest was Cotempla XR, which is used to treat ADHD and narcolepsy, at 13 percent.

GoodRx notes that consumers aren’t typically affected by these price increases since it affects what insurers pay.

“But the list price is still a good proxy for the price of a drug. In essence, rising list prices lead to rising out-of-pocket costs for patients,” the company noted in a blog post.

What’s the impact?

Experts have differing opinions about the implications of these price increases.

On one hand, it speaks to larger trends of rising drug prices, which potentially could put needed medication out of reach for some people.

On the other hand, prices for goods regularly increase. Most consumers won’t directly feel the impact of these prices hikes.

What these increases mean may depend on, in part, whether you need a drug whose price is rising and if that cost may eventually get passed down to you by your insurer in some way.

Out-of-pocket costs are rising for people in most parts of the United States, driven in part by deductibles that have risen faster than incomes over the past decade, according to a study released in November by the Commonwealth Fund, a New York–based think tank focusing on healthcare.

But drug prices overall have largely been relatively flat, says Greg Johnson, who heads the strategy for the Council for Affordable Health Coverage, a coalition of insurers, drug manufacturers, and patient groups.

“In terms of prices, the data shows it’s fairly consistent with the past few years,” Johnson told Healthline. “Overall, costs have been pretty consistent. There’s differences by drug, but on a macro level it’s pretty flat.”

He points to a May 2019 report from the healthcare consultancy IQVIA that found drug prices have been increasing at a rate below the consumer price index.

However, Johnson notes he can’t speak to price increases for individual drugs.

What insurers think

The price increases haven’t gone unnoticed by insurance companies.

“What makes these — and all — price hikes stand out is drug prices are out of control, and Big Pharma continues to raise the prices for all Americans,” Kristine Grow, senior vice president of communications for the trade group America’s Health Insurance Plans (AHIP), told Healthline.

“Not only does that mean higher prices at the pharmacy counter, it also means higher premiums and other healthcare costs for everyone. And it particularly hits hard those people who do not have insurance coverage,” she said.

Grow adds the price increases in the first week of 2020 are an indication of bigger trends.

She points to a 2019 report that several thousand drugs saw their prices increase in the first of last year, and that on average, those increases were five times the rate of inflation.

Drugmakers usually raise prices at various points throughout a year. As for what price increases could be yet to come later this year, Grow says, only the manufacturers can know.

“We can’t speak to what drugmakers plan to do. They alone set the prices, and they alone decide whether, when, and by how much to raise those prices,” she said.

What action may lie ahead

The Trump administration and Congress are said to be looking into various actions to lower drug prices.

In the bigger picture, Johnson would like to see a move toward value-based contracting, which ties a drug’s price to how well it performs and the impact it has.

“It’s payment based on outcomes and performance of a drug,” he said. “We have agreement from our membership that that’s a huge priority.”

Johnson also points to a cap on out-of-pocket expenses for those on Medicare, which has also been a priority of the Trump administration.

Grow says AHIP supports holding manufacturers accountable for “open and honest” drug prices, creating more consumer choice through market-based tools, and reducing “government-granted monopolies” that drug manufacturers sometimes enjoy.

“Legislative solutions that keep these commitments will improve consumers’ access to affordable coverage and medications, while rewarding true innovation that delivers new treatments and cures for patients,” she said.