Hundreds of Prescription Drugs Are Costlier in 2020
Prescription medications will cost more in 2020 now that over 100 prescription drug manufacturers raised prices on about 460 drugs, according to AARP, which reported on data analysis done by the healthcare research firm, 3 Axis Advisors.
The median increase is an average of 5.2 percent, more than double the projected inflation rate for this year, according to 3 Axis Advisors’ analysis. As of January 6, 114 drug makers worldwide have raised prices on their products.
The price increase is expected to affect all consumers, but particularly seniors and younger adults who take prescription medications for chronic illnesses, such as hypertension, heart disease, diabetes, and multiple sclerosis.
Drug manufacturers negotiate prices with health insurance companies so that customers can get discounts or rebates on prescription drugs. But, federal law prohibits government health insurers, Medicare and Medicaid, from negotiating prescription drug prices.
Antonio Ciaccia, a founder of 3 Axis Advisors, told AARP that underinsured and uninsured patients and employees with high-deductible health plans will more than likely end up paying full price for their medications.
Popular Brand-Name Drugs on the Increase List
The following drug manufacturers have hiked prices for their most popular medications, according to 3 Axis Advisors and Reuters media reports:
- AbbVie increased prices on more than 10 drugs, including Humira, used to treat rheumatoid arthritis and Crohn’s disease, and Skyrizi, which treats psoriasis. The price for Humira and Skyrizi rose by more than 7 percent.
- Brystol-Myers Squibb said it would increase its prices by no more than 6 percent. The company raised prices on 10 drugs, including the blood thinner, Eliquis, which rose 6 percent, and Opdivo, an outpatient cancer drug, which increased by 1.5 percent.
- Gilead, which produces HIV drugs, Truvada, Descovy, and Biktarvy, raised prices 4.8 percent.
- Merck increased prices nearly 5 percent on about 15 drugs. Merck makes Januvia and Janumet, both are used to treat diabetes. Keytruda, a cancer infusion drug, increased 1.5 percent.
- Norvartis increased prices between 5.5 to 7 percent on nearly 30 of its drugs. Norvartis makes Cosentyx, used to treat psoriasis, and Gilenya, used to treat multiple sclerosis.
- Pfizer Inc. increased prices by an average of 5 percent. The largest increase was 15 percent on the company’s Heparin blood thinner products.
The price increases come as AARP and other consumer groups call on lawmakers in Washington to pass legislation that regulates drug prices and allows the Centers for Medicare & Medicaid Services to negotiate drug prices.
Bills Call For Regulating Drug Prices
Legislation aimed at lowering prescription drug costs has been introduced in the U.S. House of Representatives and Senate. But, the bills have yet to become law.
In December 2019, the House passed H.R. 3: Elijah E. Cummings Lower Drug Costs Now Act. The bill, among other things:
- Requires Medicare and Medicaid to negotiate prices for certain drugs
- Makes changes to Medicare prescription drug coverage and pricing
- Requires drug manufacturers to issue rebates to Medicare and Medicaid for covered drugs that cost $100 or more, or the drug which the average manufacturer price increases faster than inflation
The bill moved from the Democrat-controlled House to the Republican-led Senate, where some political observers predict it will not pass. There appears to be more hope for a bipartisan bill introduced in the Senate in July.
Senate Bill 2543: Prescription Drug Pricing Reduction Act of 2019 would, among other things:
- Amend the Social Security Act to lower prescriptions drug prices in the Medicare and Medicaid programs
- Lower patients’ out-of-pocket prescription drug costs
- Increase transparency and make drug manufacturers more accountable to federal taxpayers
AARP reports that the average annual income of Medicare beneficiaries is over $26,000, while the average annual costs for a specialty drug to treat a chronic condition is nearly $79,000. With the annual cost of a specialty drug more than twice the yearly income of Medicare beneficiaries, prescription drugs are not affordable, according to AARP.
Seniors Struggle with Prescription Drug Costs
A survey released in July 2019 by the Alliance for Aging Research found that adults 65 years old and older (52 percent of survey respondents) want legislation that would cap out-of-pocket costs for prescription drugs. The survey included a national sample of 2,203 adults 60 years old and over with health insurance.
Survey results showed that 1 in 5 respondents 60 years old and older struggle to pay for their prescription drugs. What’s more, 1 in 4 respondents (24 percent) said they no longer take their medication because of the costs.
At FCP Live-In, we understand how important prescription drugs are to our older adult clients who have chronic health conditions. Our agency helps seniors who want to live independently remain in their homes. Our in-home caregivers provide many important services and one is helping seniors maintain their prescription medication schedules. Prescription drug costs and health care costs are among the top issues in the presidential debates this year. But consumer advocates say, patients will continue to pay high, out-of-pocket costs until laws pass that make prescription drugs more affordable.
H.R. 3: Elijah E. Cummings Lower Drug Costs Now Act.