ErieNewsNow Special Report: The High Co$t of Prescriptions, Part 1
HARRISBURG, Pa. (ErieNewsNow) - Prices for everything are increasing, but prescription drug prices have skyrocketed in recent years. For millions of Americans, high drug costs are impacting the quality of treatment and the quality of life.
“What do you do about the rest of your bills? You’ve got your mortgage, your car payment. You know, the little things, you need groceries, you wouldn't have anything left,” said Judy Sabia, one of the more than 130 million Americans who rely on prescription medication every day.
“I get up, I take my pills and I take a lot of pills,” said Sabia.
Nine medications to be exact, day and night, some of which she can't live without. Between diabetes, high blood pressure, a liver transplant, and complications resulting from a tumor, Sabia has her hands, and pillboxes full.
“It caused a chain reaction. Everything went from something else, it went from that, to another tumor,” said Sabia as she detailed her health struggles after a cancer diagnosis in 2018. On top of her overwhelming health complications, Sabia has to find ways to afford her medication.
“We worked hard for what we have, and now we have to scrounge different things. I've already went into my retirement funds just to pay for things, and that's pretty tough. What’s going to happen when it runs out, and I’m not dead yet,” said Sabia.
The prices for each prescription she relies on are getting out of hand to the point where she had to set up a "Go Fund Me" to afford her life saving medication.
“If it wasn't for the Go Fund Me, I wouldn't have anything left. But that's almost gone, and then I don't know what I'm going to do after that. I'm just hoping they do something,” said Sabia.
Nationwide, 18 million Americans are struggling to pay for necessary drugs as prices continue to soar.
“Our entire prescription drug supply chain is predicated upon artificially inflated list prices,” said Antonio Ciaccia, President of 3 Axis Advisors and a drug pricing expert who's experienced the ins and outs of the complex drug supply chain. According to Ciaccia, the drug supply chain is one of the leading reasons for high prices. “Every one of those layers of the drug supply chain would love to charge as much as they could get away with,” he added.
According to the Congressional Budget Office, out-of-pocket spending for prescriptions fell more than 40 percent from 1990 to 2018.
Ciaccia says as more people relied on insurance, prices and the role of Pharmacy Benefit Managers (PBMs) increased.
“But as we as consumers relied more and more upon prescription drug coverage, rather than paying with our wallets, the role that PBMs had became more pronounced,” said Ciaccia.
PBMs were designed to act as a middleman between pharmacies and insurance companies to negotiate costs and discounts. But somewhere along the way, the lines got blurred as costs skyrocketed.
“The problem started to emerge when PBMs weren't just acting as negotiators, but were cashing in on the negotiations. They were essentially being paid by the drug manufacturers in exchange for covering the drugs. They started opening their own pharmacies, their own mail order pharmacies. PBMs have become both the firefighters and now the arsonists of prescription drug prices,” said Ciaccia.
Nationwide, spending on prescription drugs increased by more than $300 billion from 1980 to 2018. If everyday essentials like milk or gas grew the same rate, they'd cost over $12 and $13 per gallon, respectively.
Ciaccia says through administrative fees, rebates and spread pricing, PBMs have been able to cash in on prescriptions, including those for government programs like Medicaid.
"To the degree with which they are overinflated, we as taxpayers, indirectly are the ones that are footing the bill,” said Ciaccia, who added that with little transparency and oversight, PBMs have been able to essentially buy low and bill high at the expense of taxpayers and patients. “Today, PBMs are Fortune 15 companies. They are larger than the drug manufacturers and pharmacy companies that they were hired to control,” he added. “If a patient is at the end of the bill, they're being stuck paying a disproportionate share that they should.”
Patients like Sabia, who are running out of options.
“It might cost them $0.10 to make something and they're charging $20 for it. They have to do something. It's not fair to anybody,” said Sabia.