With the new year comes new, higher prescription costs
With the new year comes new, higher prescription costs
There are only a few things certain in life: death, taxes and apparently increases to prescription drug prices at the beginning of the year. And drugmakers plan to raise prices on more than 500 drugs this month, according to the health care research firm 3 Axis Advisors.
“January is the hotbed of prescription drug pricing changes,” said Antonio Ciaccia, president of 3 Axis Advisors.
Mostly, it’s because that’s also when insurance plans turnover. Ciaccia expects prices to increase around 5% this month, which he said is typical.
“One could argue that if a drug manufacturer didn’t take a price increase, that, in essence, it’s a price cut because their prices are not keeping up with rates of inflation,” he said.
Inflation is one factor drugmakers note, as well as worries about supply chains that cross the Middle East. But drug pricing strategy is often opaque, according to Stacie Dusetzina, a professor of health policy at Vanderbilt University.
“These price increases can be pretty arbitrary. I think that’s one thing that really frustrates the average person and the policymakers around drug price increases,” she said.
It’s one reason why there’s been more regulation of drug pricing, including the 2022 Inflation Reduction Act, which capped how much drugmakers can increase prices for people on Medicare.
“So now they’re limited to increasing prices only at the rate of inflation,” Dusetzina said.
But that doesn’t shield everyone else from rising costs. As for everyone else, including health insurers, pharmacies and you?
“So, for an individual, it really is going to depend on what their insurance situation is, what their out of pocket expenses are, what their copay is,” said Andrea Ducas, vice president of health policy at the Center for American Progress.
It means you won’t really know how much these price increases will affect you until you get to the pharmacy counter.
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