Are Drugs Really Getting More Expensive? Yes.

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Tori Marsh
Tori Marsh, MPH, is on the Research Team at GoodRx, and is the resident expert on drug pricing and savings.
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It’s true: Drugs really are getting more expensive.

According to a new GoodRx analysis, the average list price for the top 100 prescription drugs climbed higher over the past year, even as concerns over high drug prices grow in the U.S.    

Our top insights:

Using a GoodRx Index of the 100 most commonly prescribed drugs, we found that cash prices increased from an average of around $78 in February 2017 to over $81 this past January – an increase of 6%.

GoodRx analyzed U.S. prescription trends and found that the average list prices for the 100 most commonly prescribed drugs rose by 6% over the past 12 months (from February 2017 through January 2018), with a significant increase in just the past 3 months. The increase was particularly noticeable among certain categories of drugs such as diabetes and contraceptives, while list prices for sedatives, gastrointestinal medications, and opioids actually went down somewhat over the past year.

Cash prices for diabetes prescriptions, in particular, surged 15% over the past year, driven by a growth especially in insulin prices, which is now used by more than 10 million Americans, according to the Centers for Disease Control and Prevention.

About the analysis

The GoodRx Index tracks prices for the 100 drugs that are most frequently prescribed in the U.S. – in other words, the drugs most Americans actually take, at the prices people are actually paying at the pharmacy. Unlike some other drug price surveys, our report does not include health care practitioner (HCP) administered medications that you can only get from your doctor (not the pharmacy), or exceptionally costly drugs such as so-called specialty drugs that can cost tens-of-thousands of dollars but are used by a relatively small population.

Given their high prices, very few, if any, patients pay out-of-pocket for these specialty drugs. But they do contribute significantly to overall drug spending and healthcare costs. A recent Kaiser Family Foundation analysis attributed most of the rise in drug spending to specialty medications and branded medications (drugs without a cheaper generic equivalent). That report also found that around 14% of spending on prescription drugs was out-of-pocket in 2016.

This data represents the full list prices at the pharmacy – the so-called “usual and customary” price; it doesn’t include insurance co-payments or co-insurance payments. Most Americans pay for these drugs with insurance, but every year more people end up paying some of this cash prices out of pocket, due to health insurance with high deductibles, insurance formulary changes that push some drugs off the list of covered medications, and fewer annual enrollments into Obamacare. Indeed, 6.4 million fewer Americans are expected to be insured in 2019, and fully 36.9 million people will lack minimum essential coverage, according to a new report by the Urban Institute.

About 20% of Americans pay the full list price of their drug, according to PhARMA, whether because they lack insurance or their insurance doesn’t cover the drug they’ve been prescribed. In addition, many other patients pay a significant portion of this list price because their insurer has put their drug on a low-tier formulary, or because they have a high deductible, exposing them to the higher-than-copay price. A new CDC analysis says that 43% of Americans under age 65 are in a high deductible plan, up from 39% in 2016.

Generics are getting more expensive

While the availability and use of generic medications – which are generally more affordable than the brand-name version of a drug – has grown substantially over the past couple of years, prices for generic medications have increased, according to our Index. In February 2017, consumers paid an average of $72.17 for a 30-day supply of their generic medication. Today, consumers are paying an average of $78.08 per prescription – that’s an increase of 5% over the past year.

We can most likely attribute these price increases to a couple of factors, including lack of competition in the market, rising manufacturing costs, and consolidation of generic manufacturing companies. With no concrete fix in sight, we expect to continue to see price increases for generic medications.
Diabetes medications are getting even more expensive

For the 13% of Americans battling diabetes, we have some bad news – prices are still going up. Over the past year, the average cash price for diabetes medications increased from $337.70 in February 2017 to $388.58 in January 2018 – a 15% leap over the year.

Most of this increase can be attributed to one type of diabetes medication, insulin. Popular Insulins like Lantus and Novolog are lifesaving for many but can cost an average of over $500 for a 30-day supply. Patients currently spend more than $700 annually in out-of-pocket costs for insulin, according to a report in the Journal of the American Medical Association. If prices continue to increase at this rate, we could be seeing more people unable to care for their illness.

These drugs often have spotty insurance coverage, meaning that many people with diabetes are on the hook for the full cash price of the medication.
Prices are also climbing for birth control medications

It has been a bad year for women who struggle to afford birth control. Employers may soon no longer be required to provide coverage for contraception, and many women’s health clinics have been closing – forcing many to pay out of pocket for their birth control. This reduction in coverage has been accompanied by rising prices for many birth control prescriptions.

In February 2017, women paid an average of $79.36 for their birth control (not including IUDs or birth control shots). Out of pocket costs have steadily increased by 7.7% over the past 12 months, and women are now paying an average of $85.48 for their birth control, according to January 2018 figures.

Note again that these are average cash prices. Birth control is covered by insurance for most women and many forms of generic birth control pills cost around $20 per month, though some branded formulations routinely hover over $100.
The 10 most popular drugs in January 2018

Every month, GoodRx tracks the most popular drugs being prescribed in the U.S., comparing total prescriptions written and filled for all forms of the medications. This analysis is based on a representative sample of prescriptions filled at U.S. pharmacies across the 50 states. The result is a Top 10 list of the most prescribed drugs in the United States.

  1. Atorvastatin
  2. Levothyroxine
  3. Lisinopril
  4. Hydrocodone/acetaminophen
  5. Amlodipine
  6. Ventolin
  7. Amoxicillin
  8. Prednisone
  9. Omeprazole
  10. Azithromycin
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