Inflation directly affects the prices of prescription drugs in the U.S., but the Inflation Reduction Act can help combat the soaring prices and make them accessible to patients.
According to a 2022 survey , one in three adults says they haven’t taken prescription medications due to the high cost of United States drug prices. The survey further states that the U.S. spends more than $1,000 to obtain prescription medication for each citizen. This amount is higher than the cost of medicines in peer nations, such as the United Kingdom.
In 2018, half of the prescription drug price increases in the United States exceeded the inflation rate of 2.44% . As inflation continues to increase, drug manufacturers’ prices of new medicines have risen by 4.2%. This trend shows that higher inflation rates affect the prices of available drugs in the market.
Policymakers must understand the “why” behind the United States spending more on prescription medications per person so they can develop effective policies. These policies help to reduce the costs of United States drug prices over time. Read on to learn why inflation affects drug prices in the U.S. and how it affects you , including the policies put in place to reduce prescription drug prices.
Drug prices are outpacing inflation
United States drug prices are outpacing inflation. 50% of drug prices with Part D plans and 48% of drug prices with Part B plans outpaced inflation between July 2019 and July 2020. One reason for these increases is that the government does not have the power to negotiate prices with manufacturers.
The initial prices of prescription medication in the U.S. are high in large part due to market dynamics . The 340B, Drug Pricing Program implemented to help U.S. citizens access affordable medicines, is not enough to reduce the rising cost of prescription drugs. This is due to the Drug Pricing Program allowing hospitals to buy 340B medications at high discounts. These hospitals then charge patients with and without insurance at expensive rates.
Everything is getting more expensive, and drug prices are no exceptio
As inflation rates rise yearly, drug prices, especially medication for certain conditions such as autoimmune diseases, continue to increase. This phenomenon has caused the treatment cost of about 17 drugs to inflate to $700,000 and five medications with treatment prices over $1 million, making it all but impossible for patients who use them to renew their prescription medications.
When treated with certain drugs, some medical conditions like multiple sclerosis and cancer have costs the highest-priced medication . These drugs can cost around $100,000 a year, and in recent years some new treatments have launched with prices closer to the $400,000 per year range.
Typical conditions are not left out as medication prices for conditions like diabetes have been soaring and are becoming increasingly unaffordable. Patients have to take these medicines daily, and the astronomical prices of the medication pile up yearly. Retail drug costs take up 18% of the patient’s total health spending in healthcare plans. Changes and fluctuations in prices impact the out-of-pocket treatment they pay. This causes severe financial stress on the patients.
The federal health secretary can’t negotiate drug prices
One reason prices are not regulated is that drug manufacturers are given the exclusive right to sell their drugs. According to the current legislation, the U.S. government cannot use its power to bargain better prices for its citizens. If the government could negotiate the prices of drugs directly with the manufacturers, it would reduce medication costs.
Exclusive rights for new drugs have been given to the producing companies for some years. The idea is to help manufacturers have exclusive rights to their patents and production investment returns. For more common drugs, the period of exclusivity is five years. Medications produced in small quantities or for special conditions have a period of exclusivity of seven years.
Drug companies monopolize the market for that particular drug during the entire period. Since these companies can charge whatever they want, the prices of prescription medications have increased.
Lawmakers are considering legislation to govern drug company practices that monopolize prescription medications. States across the U.S. are trying to enact laws prohibiting incessant price hiking. Some states have passed laws that address price gouging by asking for more cost transparency from drug companies.
Legislators are seeking to require drug producers to give notice of unavoidable price hikes and explain the reasons for the increase. They’re also trying to pass laws allowing them to import drugs at lower prices from other countries. Of all the suggested regulations, the Inflation Reduction Act is proposed to give a lasting solution to the soaring costs of drugs.
The Inflation Reduction Act could eventually put a cap on price increases
The Inflation Reduction bill proposes reducing prescription medication costs and limiting out-of-pocket medical expenses. Lawmakers could negotiate medication costs with the manufacturers directly, but there is a condition. The drugs must have been on the U.S. market for several years to qualify for negotiations.
Lower costs of U.S. drug prices help you save money and allow people with severe health conditions and seniors to better manage their health.Under this reform, people won’t pay more than $2,000 out of their pocket per year for prescriptions.
Need prescription drugs at discounted rates?
Managing health conditions without access to affordable medicines can strain your finances. With the introduction of the new Inflation Reduction Act, there is hope for getting access to lower-priced medications. Before the bill is passed and the law is put into place, you need to obtain medicines at low prices.
That’s where ModRN Health comes in. At ModRN Health, we can help you access affordable medicines even in the face of current inflation. Register with us today for access to various drug discounts, medication reminders, and reward points for filling your prescription.
