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Delayed care for diseases can result in worsened health outcomes. Complications due to increased healthcare costs create significant barriers for the effective management of diseases. Out-of-pocket expenses for patients without insurance, or treatments not covered by insurance, can result in impossible situations for patients with pressing needs. So why are some drugs so expensive to access? And how does this affect patients? Click through this gallery to find out.
The numbers are clear. The overwhelming majority of people living in America are taking some sort of prescription medication. About 70% of all adults take at least one prescription medication per day, while nearly one-fourth of all adults take four or more prescription medications on a daily basis.
For senior citizens, the number is even higher. About 85% of adults aged 60 or older are taking at least one prescription medication per day.
A study from Penn State University, pointing to the prominent and, in some ways, permanent role medication has taken in our lives, notes that US-born men will spend nearly half their lives taking prescription medication, while for US-born women that number reaches 60%.
What accounts for the difference between men and women's prescription intake? For starters, hormonal contraceptives and birth control account for about one-third of the difference. But women also have greater use of painkillers and psychotherapeutic drugs, for conditions such as depression, anxiety, and ADHD. For their part, men overwhelmingly take drugs to treat cardiovascular disease.
In 2018, prescription drug costs reached US$335 billion. Out-of-pocket costs, meaning costs not covered by health insurance or any other private options, accounted for 14% of all spending ($46.9 billion). By 2026, the number is set to increase by nearly 200%.
Has increased use of prescription drugs made Americans healthier? This is unclear. Many medications that are taken today have only been on the market for the last 40–50 years. Therefore, it hasn’t been long enough to really understand the impact to overall health and quality of life. Although, there is a decrease in premature deaths from chronic diseases that can be mitigated through proper treatments.
Yet a 2022 report notes that drug overdose, COVID-related complications, injuries, heart and liver diseases, as well as suicide, are on the rise. The uptick of these causes of death have accounted for the consistently lowering life expectancy age in the US.
In 2019, the life expectancy for Americans was 79 years, the highest it had ever been. By 2021, the number dropped to 76 years. It is worth noting that regions with the lowest life expectancies are also those struggling with difficult socio-economic conditions.
These areas are also states that have the most uninsured residents in terms of health insurance, and whose representatives have consistently voted to decrease access and expansion of Medicaid, a government program that provides health insurance for the disadvantaged.
Therefore, there seems to be a clear link between access to medical care and life expectancy. Given the sheer percentage of Americans that are taking prescription medication, we can also assume that access to medication and disease management could also influence those numbers.
The US has had the highest per capita prescription medication spending for over a decade. In 2021, the number reached US$1,432 per American. According to a study by KFF, one in three Americans are unable to take medication as prescribed by their doctor because of cost.
A 2021 study found that newer drugs for chronic conditions, including cancer and diabetes, often cost tens of thousands per year. This cost, coupled with rising poverty rates (nearly 12% in the US), makes access to medication for the uninsured or underinsured impossible, as patients are forced to choose between medication or other necessities.
While access to insurance is important and can help cover some costs, rising deductibles and co-pays still leave many patients with significant out-of-pocket expenses. For low-income individuals and the elderly, who are more likely to have chronic health conditions and, therefore, require regular medication, the costs of medication are just not feasible.
Pharmaceutical companies claim that the price of medication is due to the high costs involved with research, development, and regulatory approval. But the supply chain of drug production is quite clear, and companies’ reasoning doesn’t quite reflect it.
In short, a prescription drug’s life cycle consists of four key parts: obtaining the raw ingredient, manufacturing the drug, wholesalers, and dispensing. The majority of raw materials for drugs manufactured in the US come from India. The geographical concentration on the sourcing of the chemical compounds for drugs leaves the market vulnerable to shortages.
In 2023, 123 drugs experienced shortage, the overwhelming amount of which consist of chemotherapy drugs. Approximately 90% of cancer treatment centers in the US are facing shortages.
In addition to shortages of materials, wholesalers, those who set drug prices, consist of only three firms for about 90% of the entire pharmaceutical industry.
Unlike many other countries, the US overwhelmingly does not negotiate with drug companies. This was concretely made into law in 2003 by then-President George W. Bush, which explicitly prohibited the government from directly negotiating prices. Coupled with a lack of regulation, pharmaceutical companies have little incentive to lower prices.
The Biden administration did make a diversion from this legislation in 2023. As part of the Inflation Reduction Act, President Joe Biden announced a set of 10 medications, for diseases that affect millions of Americans, that would be negotiated for those covered under Medicare.
Advocates believe this approach remains partial and incomplete, as this negotiation only applies to those with Medicare, which only accounts for 18% of the population. Nearly 10% of Americans do not qualify for Medicare and do not have access to private healthcare options.
Medications under Medicare account for 32% of the market, while medications under private insurance account for 40%. There are no limitations on the prices that can be charged to private insurers. Over 80% of Americans support negotiations for those covered under Medicare.
The effort by the Biden administration to negotiate these 10 drugs has not been met with ease by the pharmaceutical industry. Lawsuits have followed. Public attacks geared toward Democrats, too. Many efforts are being made by the industry to prevent this measure from being implemented. With the uncertainty of the 2024 election, the unclear fate of these efforts remains abstract.
Pharmaceutical and health lobbies, referring to groups who politically advocate for the interest of these industries, have spent over US$12 million on campaign contributions, the majority of which has gone to Republican campaigns.
The pharmaceutical industry spends the most money on political lobbying. Since the 1990s, Republicans have received 64% of the campaign contributions from these lobbies. It is worth noting that no Republican voted in favor of the Inflation Reduction Act.
What do pharmaceutical companies argue, in terms of their opposition to drug negotiations? They say it’ll hurt innovation, as there won’t be enough money going to research and development. But the majority of these activities occur in taxpayer-funded initiatives. The impact to the actual development of life-saving drugs is projected to be quite minimal.
Although the Inflation Reduction Act won’t control the prices of drugs sold via private insurers, the efforts to do so for public healthcare coverage is viewed as ‘big government’ and, essentially, an intervention of the market. In reality, the US government would, in this case, actually function as a business, or a purchaser, rather than a price regulator.
How does the US plan to bring pharmaceutical companies to the negotiation table? One of the measures in the Inflation Reduction Act includes a tax of up to 95% on sales for companies that don’t engage with the negotiation process.
Image: Food and Drug Administration Commissioner Robert Califf.
The pharmaceutical industry has filed several lawsuits arguing that the kind of negotiations that the Inflation Reduction Act proposes is unconstitutional. These cases will likely go to the Supreme Court.
Addressing the high cost of medication is a pressing issue for those in the US. Making treatments and, therefore, disease management accessible is essential to improving health outcomes for Americans.
The decreased US life expectancy is a jarring consequence of disease, mental health and drug crises, and inequitable access to preventable care. While drug prices play a part in this process, policy changes aimed at health reform and socio-economic provisions are essential to ensuring a healthier nation.
Sources: (CivicScience) (U.S. Pharmacist) (Penn State University) (Harvard University) (World Bank) (Center for American Progress) (KFF) (The New York Times)
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Delayed care for diseases can result in worsened health outcomes. Complications due to increased healthcare costs create significant barriers for the effective management of diseases. Out-of-pocket expenses for patients without insurance, or treatments not covered by insurance, can result in impossible situations for patients with pressing needs. So why are some drugs so expensive to access? And how does this affect patients? Click through this gallery to find out.