The cost of prescription drugs grows more slowly than other health care costs, employers are eager to give pre-deductible coverage to pay for drugs, and the cost of drugs can triple if they are administered in a hospital, three studies find.
Three recent reports give a clearer picture of the cost of prescription drugs—and show that a blunt instrument like price controls is not the best way to help patients pay for medicine.
Drug prices are relatively stable—and average around 15% of health costs, even as the use of pharmaceuticals has increased, says a study of 11 countries by health care researcher IQVIA.
While the U.S. had the highest health care spending, this is due mostly to higher costs for physicians and hospitals. U.S. spending on drugs was a below-average 14%, the report found.
The cost of drugs rises greatly when administered in a hospital instead of at a doctor’s office, according to a survey of 72 physician-administered drugs by the Employee Benefit Research Institute (EBRI). Hospital charges were an average of three times the charges from a physician’s office for administering the same drug.
Employers are recognizing the barriers to care caused by high cost-sharing, according to the EBRI’s latest study, which found 76% of employers took advantage of recent IRS Guidance allowing HSA plans to provide pre-deductible coverage for 14 medications and services for chronic conditions.
The bottom line: “The U.S. develops more innovative drugs than the rest of the world combined. Addressing patient costs requires more nuance than a bill that will eventually dry up the investment well,” said BIO’s Dr. Michelle McMurry-Heath on a recent episode of the I am BIO Podcast—listen at Apple, Google, or Spotify.
Drug price controls will hurt patients—which is why BIO supports other means of controlling patients’ out-of-pocket costs,including a cap on costs for Medicare Part D beneficiaries to cap costs for Medicare Part D beneficiaries.
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