By Brad Constant
The United States has the highest prescription medication prices in the world. In fact, the cost of prescription drugs in the United States is two to four times higher than that of the rest of the world, according to a 2021 report from RAND Corporation. The high cost of prescription drugs often creates a barrier for millions of people looking for proper treatment, especially minorities.
Medicaid Disparities
The Department of Health and Human Services recently released data focusing on the problem of prescription drug costs for Medicare beneficiaries. The data shows that nearly five million Medicare beneficiaries struggle with the high costs, especially Black and Latino beneficiaries.
High cost is one of the biggest indicators of medication non-adherence, as shown in multiple studies. In fact, 2.3 million Medicare beneficiaries over the age of 65 reported skipping prescriptions because of cost. But this number increases for Black and Latino beneficiaries over the age of 65, who are 1.5 times as likely to report prescription drug affordability challenges and twice as likely to skip a prescription altogether.
An Issue of Wealth
The racial disparity of wealth in the United States is a well-known issue. In 2021, the Federal Reserve reported that Black and Latino households earned about half as much as the average White household. Wealth disparities have a direct correlation with negative health consequences.
A study, by Chein-Wen Tseng, MD and associates, published in the Diabetes Care Journal found that race and ethnicity are a predictor of medication underuse due to cost. This is attributed to lower incomes and higher out-of-pocket costs, despite all study participants having health insurance.
A Matter of Insurance
While we’re on the subject of insurance, nearly 31.1 million Americans did not have health insurance in 2021 according to the Centers for Disease Control and Prevention. Paying for prescription medication at the current prices in the United States is practically impossible for those without health insurance.
What Is Being Done
Medicaid Expansion
Expanding Medicaid has had a major impact on access to basic health coverage. To date, 39 states have expanded Medicaid coverage to nearly all adults with incomes up to 138% of the Federal Poverty Level ($17,774 for an individual in 2021).
The American Care Act has also been imperative to increasing health insurance among low-income Americans, namely people of color. A record 14.5 million people purchased health insurance under the ACA in 2022. Prescription medications are one of the ten essential benefits covered by the ACA.
Lastly, the Federal reforms to let Medicare negotiate prices, cap out-of-pocket costs for prescription drugs and limited insulin cost-sharing would help make prescription medication more accessible to the entire American population.
Rebates Given Directly to Patients
Rebates on prescription medications have been around for a long time. But understanding rebates means knowing the key stakeholders in the prescription drug distribution chain: pharmaceutical manufacturers, health insurers, pharmacy benefits managers (PBM), pharmacies, wholesalers, and, lastly, patients. A rebate is paid by the pharmaceutical manufacturer and moves through the distribution chain, with patients being the last to see any discount.
To make matters even cloudier, rebates are a trade secret and only negotiated by the PBM before being passed on to the health insurer. Oftentimes, the PBM retains 10-20% of the rebate, with little or no rebate passed on to the pharmacy or patient.
To learn more on the finances associated with rebates please read this article by Millman.
Ending Direct-to-Patient Advertising
There are only two countries in the world that allow direct-to-customer advertising for prescription drugs; the United States and New Zealand. On most occasions the medication being advertised is far more expensive than the generic medication that does the same thing. No big deal right? Wrong, because DTC advertising works really well, leading patients to only ask for, and sometimes demand, the expensive drug.
Looking for Assistance
Rx Assist – Patient Assistance Program
1. Visit www.rxassist.org to find a quick-reference chart that lists drug assistance programs by state. The site will list the population served by each program (ex. may only provide assistance to elderly or disabled patients), as well as contact information. This website was developed by Volunteers in Health Care (VIH).
Medicare
2. Visit the Medicare website at www.medicare.gov/prescription/home.asp to locate information on public and private programs that offer discounted or free medication, as well as Medicare health plans that include prescription coverage.
Community Health Centers
3. Community health centers may offer prescription assistance to low-income patients. To locate a center in your area, contact the Health Resources and Services Administration at 888-ASK-HRSA (888-275-4772).