Blair Horner: Shopping Smart For Medicines
The crisis in the cost of medicines in America is well-known. Americans spend more on prescription drugs — about $1,200 per person per year — than spent anywhere else in the world. The prices can be staggeringly high. For example, newly-approved cancer drugs in the U.S. can cost $10,000 a month.
These costs are often not directly borne by the average American who has insurance coverage. Generally speaking, private insurers and government programs pick up the biggest share of the bill. However, high drug costs directly impact health care premiums and taxes – both of which are rising.
Unlike other countries, the U.S. doesn’t directly regulate medicine prices. In Europe, governments negotiate directly with drug makers to limit the cost to their state-funded health systems. Private payers in the U.S., such as employer health plans, typically negotiate discounts for their enrollees. But for those without coverage, there is no negotiation.
As a result, patients in the U.S. directly pay about 14 percent of prescription medicine costs out of their own pockets. In one survey, one in five adults in the U.S. said they failed to complete a prescribed course of medicine because of cost.
And failing to take prescribed medicines can have devastating consequences. According to a 2019 Gallup poll, more than 13% of Americans reported knowing of at least one friend or family member in the past five years who died after not receiving needed medical treatment because they were unable to pay for it.
If private employers negotiate for the price of medicines and states limit drug choices to help offset costs, who looks out for those without health insurance coverage or whose plans do not adequately cover prescription drug costs?
Other than possible help offered by drug companies or pharmacies, New Yorkers without coverage are left to comparison shop for the lowest drug prices. The state of New York tries to assist that effort by collecting drug prices for the most widely prescribed drugs.
Under New York law, the state Health Department has created a website to allow consumers to comparison shop for the most frequently prescribed medicines. The website allows consumers to search as many as six medications simultaneously by zip code, county or city. For consumers who lack adequate coverage for prescription drugs, the Department’s website could yield considerable savings. The law also requires that at the checkout area of each pharmacy a written notice must be provided informing consumers about the availability of the website.
The need that could be filled by this program is real. According to recent U.S. Census information, about one million New Yorkers lack health insurance, meaning they must pay full retail price for prescriptions.
A survey of drug prices in New York pharmacies showed a shockingly large range in retail prices across the state. In fact, a recent survey of prices posted on the state Health Department’s website by the New York Public Interest Research Group, revealed that in some cases consumers could be paying as much as $400 more for the exact same prescription in the exact same county.
NYPIRG reviewed twelve of the state’s largest counties and examined the prices for five brand name medications. NYPIRG found an enormous range in prices charged, with the greatest disparity of $433 for the drug Spiriva in Manhattan. In Albany county, the drug Januvia had the greatest range in price surveyed – a difference of nearly $160.
Clearly, it pays for consumers to shop smart. Yet, those comparisons only work if the public knows of the existence of the program. Under New York State law, each pharmacy is required to post a sign alerting the public to the drug pricing website. Too often, they do not.
Given that about one million New Yorkers need to know the costs of their medicines, the state must do better. If costs are too high, those who can’t afford medications often go without. Not taking needed medicines can result in devastating consequences.
Of course, expanding coverage is the best response, but in the meantime, New York must make sure that this program works. New York should publicize the website, make sure pharmacies are conspicuously displaying the website information and come up with an easy-to-remember website address so the program can benefit all New Yorkers who need help purchasing the drugs to keep them well.
Blair Horner is executive director of the New York Public Interest Research Group.
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