The price of prescription drugs is one of the most contentious and misunderstood issues in healthcare. Having worked on prescription drug issues for over 30 years in the federal government, US Congress, and healthcare industry, as a consultant, and with patient and clinician advocates, I've seen how the foundational misunderstanding and misrepresentation of prescription drug prices has stymied efforts to improve access and affordability.
The issue of prescription drug prices has such a high public profile because medicines are a very important component of care, and higher prices can translate into higher costs for patients, which means some patients can't afford their medicines.
Unfortunately, the resulting political rhetoric and proposals (supported by poll numbers) often conflicts with public policy that could improve lives — and even save money.
To shed some light onto this very complicated situation, below are short insights into 10 important and interconnected aspects of drug prices in the US. Some of these may be apparent to clinicians and patients, but others are rarely discussed.
1. There are no set prices for prescription drugs in the US.Specifically, while a company will set a list price, what insurance companies and government programs pay for prescription drugs is almost always a range of lower prices created by rebates and discounts that are either negotiated with private payers or required for government programs like Medicaid and the VA.
