Experiencing a hike in your prescription costs? Here’s what you need to know!

Today we will cover some current events related to a recent rise in drug costs seen in January. We will dive into why it is happening, the severity of these price hikes, and what this means for drugs entering the market in the future.

Why are you experiencing increased drug costs?

In January, drug companies raised the prices on nearly 1000 drugs, leaving many with a sense of shock when they went to pick up their regular prescriptions. Wondering why this sudden increase occurred? Analysts have not yet confirmed a true causality yet, but the new federal legislature appears, at least for now, to be the culprit of recent price hikes. With the implementation of the Inflation Reduction Act, requiring Medicare to pay a rebate if they increase drug prices above the rate of inflation. Drug affordability is already an issue as 30% of people claim that they do not adhere to their medication regimens due to the prices being too high.

Exactly how much are these increases?

From recent data collection, the median price appears to be roughly 5%, only 0.1% more than the increase seen between 2021 and 2022. To note the extremes of the spectrum of price hikes, the highest increases, accounting for two dozen of the 985, saw roughly a 10% increase. The lowest end of the spectrum, also two dozen drugs, saw increases of only 1% or less. Some of the most pertinent drugs in recent times have increased as Humira (8%), Eliquis (6%), Imbruvica (6.2%), and Stelara (4%) have all seen increases. A lot of the drugs that have seen the highest increases have also been directed toward injectables typically only seen in a hospital setting. 

How will this affect new drugs?

Continuing with the trend, new drugs are also expected to see increases in their prices at the time of their launch. When drugs are released, depending on the type of drug and how it is administered, there is a certain period of time where the drug prices are subject to the autonomy of their producers. Drugs to be negotiated by the federal health program “Part D” will be eligible after being on the market for 9 years, and drugs administered by a physician “Part B” will have 13.5 years before reaching eligibility for negotiating.

References:

https://www.usatoday.com/story/news/health/2023/01/30/drug-price-increases-2023/11084913002