The Real Price of Medications

A survey of variations in prescription drug prices

A Report by U.S. PIRG Education Fund
Written by Adam Garber, Lance Kilpatrick & Reuben Mathew, U.S. PIRG Education Fund

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People living in the United States have access to some of the best medical care in the world, from life-saving drugs to cutting-edge surgical techniques. But spiraling costs force many Americans to spend more on care, even as the quality of that care remains the same.

Source: Kaiser Family Foundation Analysis of National Health Expenditures Account

High prescription drug costs are at the core of the problems Americans face in the healthcare system. For example, insulin prices have nearly doubled. And in January of 2019, the prices on more than 250 prescription drugs increased by 6 percent or more.

Ongoing price increases, combined with the fact medications already cost much more than in many other countries, is leaving 1 in 4 Americans on medication struggling to afford their prescriptions. Many are then forced to make tough choices that undermines their health: splitting doses, failing to take their medication, or otherwise rationing care.

And even when people can afford these extremely high prices, the drugs work no better than elsewhere. They aren’t getting healthier for paying more.

Prescription price survey

Our researchers called more than 250 pharmacies in diverse cities and regions across 11 states. During the calls, we asked pharmacists for the price uninsured patients or individuals whose insurance does not cover the medication or have a high deductible plan would pay for a number of medications that treat asthma, high blood pressure, diabetes, high cholesterol and other diseases.

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How to get the best deal

Our research found that common life saving medication prices varied greatly, even within the same state or city, undermining quality of care. Here are three tips for finding the best deal on your prescription medications.

1. Save big by shopping around

By shopping around, patients can save an annual total of $102 (on hypertension medication) to $5,400 (on an inhaler) off of the median prices of the surveyed medications.

2. Smaller pharmacies are cheaper

Eight of the 12 drugs surveyed were between 8 percent and 840 percent more expensive at most large pharmacies compared to smaller and independent pharmacies.

3. Generics offer more value

Switching to generic drugs, even years after they come onto the market, can save you a ton. For example, switching from branded Nexium to its generic version could save patients an estimated $756 annually.

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Policy recommendations

If we don’t make meaningful reforms, patients will continue to pay higher prices while not becoming any healthier. They will make choices to forego or ration medication, with serious consequences. Fortunately, practical policy solutions will help reduce costs and drive patients and providers to use more high value and affordable drugs that deliver care at lower prices. We can do this through:

Comprehensive transparency

Prescription drug price transparency across the health care system would serve as a foundation from which policy-makers can base further prescription price reforms and patients can better understand their costs.
Require insurers and pharmacies to provide prices for comparison online and within provider systems.

End price gouging

Creation of state boards of experts to examine prescription drug pricing (based on above transparency) and evaluate what are the best steps to reform the broken market.
Enacting laws that require notification of drastic price increases, require justification for that increase, and empower state and federal governments to reject indefensible increases.

Increase competition

Patent reform to increase the availability of generics and prevent abuses of the patent system.

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The Real Price of Medications