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As Americans rang in the new year, drugmakers were ringing up higher prices.
GoodRx, a healthcare company that tracks prescription drug prices in the United States, reports that so far this year, prices for 442 drugs (virtually all of them brand-name medications) have increased by an average 5.2%. A second analysis by research firm 46Brooklyn shows similar results, with the median price for brand-name drugs rising 4.9%. Median, of course means that half of drug prices went up more than 4.9%, while half went up less.
The data covers more than 90 companies, including giants like Bayer, GlaxoSmithKline
GSK,
and Pfizer
PFE,
says GoodRx. The increases are for a wide range of both specialty and maintenance medications, including those for allergies, arthritis, asthma, cancer, heart disease, high blood pressure, and more.
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It’s important to note that these percentage increases are based on list prices—the price of a drug as it is set by the manufacturer. Depending on your health insurance, chances are you’ll be shielded from much of these increases. But your insurer could still hit you with higher out-of-pocket charges.
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It’s also important to remember that there is typically a second major round of price increases for medications each July. If you’re budgeting for the year, things could get tighter in a few months.
Medications and out-of-pocket costs are only part of it, of course.
Medicare recipients who have a Part D plan (also called the Medicare prescription drug benefit), may have noticed that the average monthly premium for Part D coverage is $33 this year, up from $31.47 this year. A buck-53 may not sound like much, but in percentage terms, that’s a 4.8% jump. The maximum deductible for Part D coverage this year is $480, a 7.8% jump from last year. There’s also no out-of-pocket cap when it comes to Part D.
About one-fifth of Americans are enrolled in Medicare, federal data shows, a number that is growing rapidly as baby boomers (born between 1946 and 1964) retire in droves.
Even before the New Year’s round of increases, a survey by the Kaiser Family Foundation said that nearly one in four Americans struggle with the cost of prescription drugs, “including larger shares among those with health issues, with low incomes and nearing Medicare age.”
A separate study by AARP showed that “retail prices for widely used brand name prescription drugs increased substantially faster than general inflation in every year from 2006 to 2020.”
AARP added this ominous warning: “If brand-name drug price inflation continues unabated, a growing number of older Americans will face drug costs that exceed their median annual income and will not be able to take their medications as needed. This ever-expanding affordability problem will lead to poorer health outcomes and higher healthcare costs in the future.”
But the burden on older Americans has become even more onerous since, thanks to overall inflation rising at the highest rate—6.8% for the year ended Nov. 30—in four decades. For many on fixed incomes, difficult choices may have to be made in the months ahead.
Can anything be done to rein in drug prices? Here’s where politics rears its ugly head. Presidents from both parties have pitched the voter-friendly idea of letting Medicare use its sheer market size to squeeze concessions out of manufacturers. Time and again they have come up short.
The latest attempt, by President Biden, which aimed to “directly lower out-of-pocket costs for seniors” and would also penalize drugmakers for price hikes that were bigger than inflation, was stuffed into his so-called “Build Back Better” plan, which has been approved by the House, but remains bogged down in the Senate.
