The median cost per prescription for Lipitor increased from $116 in January 2012 to $274 in December 2017; Lyrica's median cost during the same period rose from $174 to $411. (Photo: Shutterstock)
It's not your imagination—the cost of prescription medication is increasing. In fact, the increases are so great that prices have doubled for some medications within just the past six to eight years.
That's according to a study published in JAMA Network Open, from the Journal of the American Medical Association, which finds that between January of 2012 and December of 2017, prices for 48 out of 49 of the most common brand-name prescription drugs rose. In fact, according to the study, “78 percent of the drugs that have been available since 2012 have seen an increase in insurer and out-of-pocket costs by more than 50 percent, and 44 percent have more than doubled in price.”
MarketWatch reports that the median price increases hit 76 percent over the six years, and some drugs didn't just have one price increase per year but two. And according to the study by Scripps Research Translational Institute researchers, there's no improvement in sight; they wrote, “Greater price transparency is warranted.”
The researchers studied drugs with more than $500 million in U.S. sales or $1 billion globally, more than 100,000 pharmacy claims during those six years, that had available net price data. They found that more than a third of the drugs they studied–17 of the 49–more than doubled in costs.
Among them were smoking-cessation drug Chantix; the statin Lipitor; nerve pain and seizure drug Lyrica; the insulin Novolog; autoimmune drug Humira; osteoporosis injection Forteo; and erectile-dysfunction drug Viagra. As an example of price increases, while the median cost per prescription for Lipitor increased from $116 in January 2012 to $274 in December 2017, Lyrica's median cost during the same period rose from $174 to $411.
Marisa Sharkey, a spokeswoman for Novo Nordisk, maker of Novolog, told MarketWatch that while “80 percent of people in non-high deductible commercial health plans pay $50 or less per month for a prescription of one of our insulin analogs, the out-of-pocket amount people with insurance pay for our medicines is due, in large part, to benefit design,” researchers found that rebates don't necessarily help consumers keep up with the cost of their medications.
In fact, they found “a high correlation between costs and net prices,… suggesting that the idea that 'higher list prices and greater reliance on rebates reduce costs' could be untrue.” In addition, they found that competition did little to nothing to keep costs down, instead concluding that “competing drugs actually had some of the biggest industry price increases over the six-year study period.”
Quartz reported that not only is there fear that the extent of the increases could price patients out of the market for drugs they rely on—already being reported among diabetics who are rationing insulin because of the expense—even cheaper drugs, like Synthroid, which has competition from generics and thus is priced in the tens of dollars instead of the hundreds, are increasing in price at equally unsustainable rates; Synthroid has gone up 75 percent for the most commonly prescribed dose over the six years in the study.
The authors of the study estimate that drug spending will increase between 2 and 5 percent over the next five years, but add that that's a conservative estimate. The number of adults over 65—a growing demographic that takes about a third of all prescription drugs—is going to outnumber the under-18 demographic by 2035 and could have a significant impact on spending.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
