Drug costs in the U.S. are climbing sharply. In 2017, prescription drug costs for Americans are expected to rise by nearly 12 percent. What’s more, prescription drugs now make up 17 percent of all health care costs. The cost impacts all Americans, even if you don’t take prescription drugs.
So, why are we constantly paying more for prescription drugs?
Why RX prices keep going up
1. More people with conditions and diseases
Prescription medicines help prevent, manage and cure many conditions and diseases. As the number of people with diseases increases, so do the costs to treat them.
2. New and specialty drugs
New and specialty drugs (those used to treat serious conditions) are one of the biggest drivers of prescription drug costs. In fact, specialty drugs account for nearly one-third of overall prescription drug costs.
3. Prices set by manufacturers
The U.S. prescription drug market is not regulated the same way it is in other countries. Here, drug manufacturers set their own prices. But in countries with national health programs, government organizations regulate drug prices. They do so by either negotiating costs or choosing not to cover drugs whose prices they consider excessive.
4. Barriers to the introduction of new generics
The Food and Drug Administration (FDA) currently has a backlog of generic drug approval requests. A quicker review and approval process would help promote competition and consumer choice, which would make medicines more affordable.
Prescription drug costs aren’t going down anytime soon. But, there are ways you can save money on medications and affect health insurance premiums, such as buying generic drugs. Learn more about saving money by buying generic drugs.