How High Prescription Drug Costs Keep Working Americans From Thriving

In the would-be land of opportunity, the American dream promises a better life for those who work hard and play by the rules. Yet, for millions of Americans who are Asset-Limited, Income Constrained, Employed (ALICE), high prescription drug costs threaten even basic physical and financial wellness. Individuals in this group often work long hours or have multiple jobs, yet can't afford prescription drugs that are vital to their health, among other needs.

Here are some of the complex factors that keep hard-working people from accessing affordable prescription drugs in the United States, how these impede the ALICE population from achieving personal and financial well-being, and how you can get help with prescription drug costs if you count yourself among them.

Factors That Contribute to High Drug Costs

Some of the drivers behind unaffordable medications include:

• Patent protections and market exclusivity. New brand-name drugs are granted strong patent and market-exclusivity protections, allowing manufacturers to set high prices due to limited competition. In 2014, only eight of the 33 new brand-name drugs launched in the US had a direct price competitor at the time of their introduction. This lack of competition leads to substantial price hikes, with some drug prices increasing by an average of 15.5% annually, far exceeding general inflation rates.
• Reliance on federally funded research. A considerable portion of new drug development is supported by federal funding. Despite this, the financial benefits of such research are not always passed on to consumers, leading to higher prices for essential drugs.
• Natural monopolies and anti-competitive behaviors. Some drugs, especially those out of patent protection, are subject to
  natural monopolies, allowing manufacturers to maintain or increase prices. Additionally, practices such as pay-for-delay agreements and product hopping by brand-name manufacturers stifle competition and keep drug prices high. 
• Complex pharmaceutical distribution system. The presence of multiple intermediaries in the drug distribution chain, like pharmacy benefit managers (PBMs) and wholesalers, creates a lack of transparency in pricing. This makes it difficult to track the true or fair cost of medications. 
• Limite state authority in price negotiation. Federal laws impose constraints on the ability of states to negotiate drug prices for Medicaid, thus limiting the potential for cost reductions at the state level. 

The Impact of High Drug Costs on the ALICE Population

The high cost of prescription drugs disproportionately affects the ALICE population. That's because their situation often comes with a double-edged sword. Low-income Americans are less likely to receive adequate health insurance benefits from their employers, and are also the least equipped to afford the out-of-pocket costs of purchasing their own healthcare coverage plan.

Without that coverage, healthcare and prescription costs are prohibitively high, causing many families to simply go without. If an ALICE individual is prescribed even one expensive medication, they may have to choose between purchasing the drug and fulfilling other basic needs, like buying groceries or paying the bills. The financial strain of this can lead to:

• Non-adherence to prescriptions. Faced with high costs, many in the ALICE group may skip doses, cut pills in half, or forgo filling prescriptions altogether, compromising their health.
• Subsequent medical emergencies or negative health repercussions. If the prescribed medication is essential for preventing major adverse health outcomes or death, failure to take it can result in otherwise preventable medical crises. If an individual experiences a medical emergency requiring hospitalization, the resulting bill can put their household in dire financial straits and debt, exacerbating its already fragile financial ecosystem.
• Missed work. Individuals whose health worsens as a result of not taking their medications are at risk of missing work. Particularly if their employer offers inadequate sick leave, this can result in lost wages or even termination, exacerbating already existing financial constraints for ALICE households.
• Unpaid bills. If an ALICE person is forced to purchase an expensive medication and is consequently unable to pay a bill, they may at best incur additional costs, such as late fees or other financial penalties, If the bill in question is something like a credit card or loan bill it continues to go unpaid long enough, the person's credit can be jeopardized.
• Financial instability. The burden of expensive medications, lost wages, termination, overdue bill fees, and bad credit can lead to enormous financial stress for low-income Americans, making it challenging for them to get out of debt, achieve financial stability, and invest in long-term goals.

The Improving Access to Affordable Prescription Drugs Act

Some government policies, such as the Improving Access to Affordable Prescription Drugs Act, aim to address high drug costs through various measures. However, this act and others also face limitations:

• Accomplishments. The Improving Access Prescription Drugs Act proposes to increase competition in the market by altering patent protections, incentivizing the entry of generics and biosimilars, and implementing measures to curb anticompetitive practices by drug manufacturers. 
• Limitations. Despite its intentions, the Act may face challenges in effectively breaking down the entrenched power structures within the pharmaceutical industry. The complexity of implementing new regulations and ensuring compliance adds to the hurdles related to improving access to affordable medications. 

Possible Solutions

Overcoming barriers to affordable prescription drugs requires a multifaceted legislative approach that may include:

• Reforming patent laws and market exclusivity
• Increasing transparency in drug pricing
• Strengthening federal and state negotiating power
• Eliminating anti-competitive practices
• Investing in drug research and development
• Encouraging international drug importation (where safe and feasible)
• Fostering consumer awareness and advocacy by educating consumers and encouraging them to advocate for policy changes in the pharmaceutical industry

Ways to Get Affordable Prescription Drugs if You Are ALICE

If you are ALICE, you can get help with affording prescription drugs by seeking out the following:

• Patient Assistance Programs (PAPs). Many pharmaceutical companies offer PAPs that provide medications at a reduced cost or even for free to individuals who qualify based on income levels.
• Generic medications. Opting for generic versions of drugs, which are significantly less expensive than their brand-name counterparts, is a practical option. Pharmacists and healthcare providers can help in identifying generic alternatives.
• State pharmaceutical assistance programs. Some states offer programs that help pay prescription drug costs. Eligibility criteria vary, but they typically target low-income individuals or those with specific conditions.
• Medicare Part D Extra Help Program. For those eligible for Medicare, the Extra Help program can significantly reduce the cost of medications.
• Apps and programs like GoodRx. GoodRx is an example of a free mobile app that helps you access the lowest prescription drug prices where you live. 
• Community health centers and free clinics. These centers often offer prescription drugs at a lower cost and can assist in connecting individuals with resources for affordable medications.
• Nonprofit organizations and community-based social services. Some nonprofit organizations and 
  community-based social service providers offer financial assistance or access to discounted medications for those in need.

Get Affordable Prescription Drugs with United Way of York County

United Way of York County in Pennsylvania assists working households in our community to achieve financial stability by collaboratively and equitable reducing barriers to prosperity. We offer access to free health and human services like affordable prescription medications, child care, assistance with tax preparation, transportation support, and more to fight for the education, health, and economic mobility of all members of our community. Download our SingleCare prescription savings card today!

We offer additional resources through PA211, a free confidential health and human services information and referral hotline. Learn about how to use PA 211 to access resources like high-quality child care, and contact us to get the services you need for a financially successful future.