It’s not a big swing to say the American healthcare system has some flaws. Americans spend more for healthcare than citizens of other industrialized countries. We don’t live as long as people in other wealthy nations, and at about 60 percent of adult Americans have a chronic health condition.
The increasing prevalence of chronic health conditions, which includes things like heart disease, cancer and diabetes, is a major strain on the healthcare system and the economy. But it also has a corollary effect that a majority of us can relate to — the expense and hassle of dealing with prescription drugs.
Nearly half of Americans take at least one prescription medication, and that number is even higher for older Americans with upwards of 90 percent of those 65 and older taking at least one prescription drug.
Americans spend more on prescription drugs than citizens of other similarly wealthy countries, and it’s expected that costs will only continue to rise in the future. Prescription drug spending stands at more than $450 billion per year and is rising faster than spending in other areas of healthcare.
Healthcare continues to be hotly debated among politicians, with many of the 2020 Democratic presidential candidates pledging support for a single-payer system, such as Medicare for All. But the truth is that for now, all Americans have to contend with rising costs, particularly when it comes to potentially life-saving medications. Some Americans, depending on where they live, do benefit from controls that legislators in their states have put in place that help curb prescription costs, but almost half of states do little to nothing to control costs.
We’ll explore the state-by-state patchwork quilt of regulations and pending legislation and look at which Americans have it the best (and worst) when it comes to spending money on prescription drugs.
An Expensive Drug Habit
Per-capita spending on prescription drugs has surged by more than 1,000 percent since 1960, according to a Kaiser Family Foundation analysis. That number stands at an inflation-adjusted $1,025 per year today.
About 1 in 4 Americans say they have a hard time paying for their medication, but out-of-pocket spending on medication has actually declined over the past few years. Still, Americans continue to pay higher prices than residents of other countries for the same drugs.
Here’s a look at typical drug pricing in the U.S. vs. other countries*:
While prescription drug spending overall is far higher today than it was a few decades ago, there are huge variations in spending by state. For instance, residents of Delaware spend more than twice what residents of California spend per capita.
There’s a 125 percent gulf between the lowest state on this list, California, and the highest, Delaware. Four states have per-capita spending levels exceeding $2,000 per year — Delaware, Tennessee, Kentucky and D.C. — and a fifth, West Virginia, is only about 20 bucks short of that.
While the state-level spending largely tracks with population levels, interestingly, in only four states is prescription spending under $1 billion per year.
It’s important to note that these figures do not account for all prescription drug spending, and not all of this spending burden is borne directly by consumers.
What You Spend Depends on What You Have
It might seem like a total “duh” statement, but for those with major health problems or particularly rare disorders, prescription drug spending will inevitably be higher. Some diseases and conditions are noteworthy not just for the toll they take on the human body but by the damage they can do to a person’s wallet.
In addition, medication overall is simply becoming more expensive, even for diseases that haven’t historically been notorious for what they cost to treat. GoodRx, a popular website for tracking the price of prescription drugs, recently reported that prices for the 100 most frequently prescribed drugs had risen about 6 percent and that even generic drugs had seen a 5 percent increase.
Of the top 10 most popular medications, four treat cardiovascular issues and two others are pain medication, including the highly controversial opioid hydrocodone.
Note that these are list prices, not necessarily what patients end up paying. And outside of a couple of the diseases, most of these conditions are exceedingly rare. Still, if you or your loved one is diagnosed with a disease for which life-sustaining treatment will run upwards of $25,000 per month, it can all begin to feel much too unfair.
Best & Worst States for Consumers
What the average person spends for a month of medication is unique to each person’s lifestyle, genetics and bad luck. We’ve already seen huge variations in how much people spend on medication across the country, but there’s another part of the equation that could have an impact — legislation.
A majority of Americans are in favor of a raft of potential measures and laws that government agencies could put in place to curb the rise of drug prices, from allowing the federal government to negotiate drug prices on behalf of Medicare recipients (92 percent approval) to capping what companies can charge for treating notoriously expensive conditions like hepatitis and cancer (78 percent approval).
Given the political divides in our nation on a national level, it seems unlikely any of the proposed controls will be enacted in the foreseeable future, but inaction on the federal level doesn’t preclude states from protecting consumers in their states, as many have moved to do.
Recent efforts have focused on three broad areas, and several states have enacted one or more of these types measures:
- Prohibiting gag clauses, allowing pharmacists to discuss options based on pricing.
- Preventing price gouging & enhancing transparency, requiring manufacturers to disclose more detailing pricing info or explain huge increases in pricing.
- Promoting so-called free speech in medicine, allowing drug makers to promote and market some drugs not yet approved by the FDA.
No state has enacted all three of these types of measures, though seven have enacted two of them. In 21 states and the District of Columbia, no such laws have passed.
Americans have a lot of diseases, and we take a lot of medication to treat and ease those conditions. While prolonging and improving lives is without question a net positive, there are still serious issues that spring from the prevalence of prescriptions that must be addressed.
There can be little doubt that in some cases, people are being over-prescribed medication, particularly when you read about the heartbreaking epidemic of opioid addiction and overdose deaths. But living longer, happier, healthier lives necessarily means taking medication — 90 percent of those 65 and older take at least one medication. As the U.S. continues to become an older nation overall, more and more people will need medication to live well into their golden years.
The variable that can change in this equation is the role of state and federal lawmakers in ensuring that consumers are protected from unreasonable practices on the part of pharmaceutical manufacturers.
About This Story
Where possible, we have linked directly to the sources of all of our data, but here’s a closer look at the other figures:
Prescription spending by state (overall and per capita): The spending data came from the Kaiser Family Foundation. We combined the retail and mail-order prescription drug sales information and used the most recent state population figures to calculate per-capita rates. The Kaiser Family Foundation’s Peterson-Kaiser Health System Tracker tool also has an excellent page that compiles fascinating data on drug spending.
Most popular/most expensive drugs: GoodRx maintains and regularly publishes data on which prescriptions are most frequently filled (note that’s not necessarily the same list as those most frequently prescribed) and which medications are most expensive when figuring a month’s supply.
State laws: The National Conference on State Legislatures was our source for which states had enacted legislation to protect consumers from escalating medication costs. The issue of state-level legislation is a constantly evolving one, and you can check out new developments here on consumer pricing protections and several other medication-related issues.
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