How to Help Patients Save on Drug Costs

Both of the major political parties in the U.S. are finally proposing ways to reduce healthcare costs. One party wants to build on the Affordable Care Act (ACA) while the other has repeatedly tried to overturn it.

Last week, Sen. JD Vance (R-Ohio), the Republican vice presidential candidate, floated an idea of grouping chronically ill patients into various pools based on their elevated risks — which would effectively bring back a concerning aspect of pre-ACA healthcare coverage.

In response, Ammar Moussa, the campaign director of the Democratic presidential candidate, Vice President Kamala Harris, declared on X, “Health care is back on the ballot.” No longer the wallflower, rising healthcare costs are again an issue. One of the many reasons for the attention is the toll of prescription drug costs and spending as a hot-button campaign issue.

Drugs Costs Have Spiraled Out of Control

A report from the Commonwealth Fund found that in 2022, at least one in 10 older adults with Medicare said they didn’t fill a prescription because of the high cost of drugs. Prescription drug spending increased 8.4% to $405.9 billion in 2022. Medicare accounts for a significant share of all drug spending in the U.S.: Medicare Part D prescription drug coverage cost about $280 billion in 2023, of which about $19 billion was out-of-pocket expenses. The 10 drugs selected for Medicare price negotiation accounted for about 20% of the total spending, or nearly $4 billion in out-of-pocket expenses.

These drugs are essential — not discretionary. Meanwhile, another analysis from the Commonwealth Fund found that the U.S. retail prices — prices charged to patients or insurers before discounts or rebates — for the drugs selected for Medicare price negotiations were between three and eight times higher compared to other countries of similar size and wealth.

We need to do everything we can to help patients afford their medications. In order to do so, it’s important to understand the reason drug costs are rising.

Why does it cost so much more for certain drugs in the U.S.? There are several factors, including a lack of price controls. In other countries, like France, there is a cap on the growth of drug companies’ sales — if sales exceed that threshold, the government gets a rebate. Patent gaming is another likely reason. Other countries issue patents to drug companies that grant them temporary monopolies, but in the U.S., drug companies have used loopholes to prolong patents.

But perhaps the greatest reason is the lack of a central negotiator. Other wealthy countries rely on a single negotiating body — usually the government — to decide whether to accept the price a pharmaceutical company wants to charge. This results in more bargaining power.

In contrast, in the U.S., negotiations with drugmakers are split among countless health plans. Ironically, Medicare wields enormous power over the costs of other aspects of medical care, dictating how much doctors and hospitals can be paid for services. But only recently has Medicare been able to directly negotiate some drug prices with pharmaceutical companies under the Inflation Reduction Act of 2022, which was narrowly passed.

Medicare provides health insurance coverage to roughly 60 million people in the U.S. This year, drugmakers were given the option of not participating in Medicare; if a company chose not to, it would cut them off from a huge share of the market. If a drugmaker wanted to participate in Medicare, they had to negotiate or pay a tax penalty. All of the selected drugmakers opted in.

Cutting Costs Further for Our Patients

One way to further reduce the cost of prescription drugs for our patients will be to support expanded legislation that gives Medicare greater power to directly negotiate with drugmakers. While policymakers work on legislation, there are three simple ways for us, as clinicians, to further reduce out-of-pocket expenses for patients. I have seen patients use one or all of these methods to limit and sometimes eliminate the need for a prescription medication. Partnering with you — their primary care or specialty physician — is an effective way to take advantage of these strategies.

The first step is an obvious one: attempt to prevent disease. Many chronic diseases such as obesity, hypertension, and diabetes can be prevented with a healthy lifestyle. Of course, this isn’t possible in every case or for every condition, but prevention should always be the first goal.

Using generic medications whenever possible is also a best practice. Patents slowly — but do eventually — expire, and then medications usually become much more affordable. Many chronic diseases can be effectively treated with generic drugs.

Doctors and patients should work together to find the smallest effective dose and ramp up on lifestyle changes with the hope that they can eventually taper off the medication. A patient needing a medication today doesn’t automatically mean they will need it for the rest of their life.

Patients, primary care doctors, and specialists can and should immediately partner to take control of medical problems and manage drug costs. Policymakers should continue to empower Medicare to advocate for more affordable drug prices and healthcare.

Prescott Lee, MD, is a staff physician at Massachusetts General Hospital-North End Waterfront Health in Boston, an instructor of medicine at Harvard Medical School, and a Public Voices fellow through the OpEd Project.

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