The Astronomical Cost of Prescriptions in the United States

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I’ve read a rant or two in the personal finance blogosphere recently and now it’s my turn! I’m infuriated at the cost of prescriptions here in the United States. My fury is a personal one and I’m going to make it my personal mission to find alternatives.

Before I begin, I should remind you all I work for a broker/third party administrator so I know a thing or two about health insurance.

I’m Violating My Own HIPAA

Okay so I’ll get personal (like I haven’t done that before – haha!) to give a backstory to my rising frustrations. When I was 23 years old I was diagnosed with Ankylosing Spondylitis (AS). My dad has it too so like father like daughter.

It’s an autoimmune disorder that results in inflammation. That inflammation is primarily in the sacroiliac joint and spin; however, it can also affect the chest, eyes, and some other joints as well.

Flare-ups are generally treated with nonsteroidal anti-inflammatory drugs (NSAIDs). Although, I’ve been treated with steroids for eye flare-ups.

Miracle Drug

So if you ever hear the term miracle drug, just think high cost. There are a series of biological medications which are made from living organisms. The Tumor Necrosis Factor alpha (TNF -α) inhibitors are very effective at treating AS as well as slowing the progression of the disease.

Wonderful, except that miracle drug = $$$

I was prescribed Humira in the fall of 2018 as I’d been having a lot of flare-ups this past summer. I’ve been taking it since with great results.

I have a high pain tolerance but my biggest concern is the progression.

You see my father’s spine is mostly fused and while he no longer has back pain, he is crippled. That is the typical progression.

The Cost

So since this is a personal finance blog let’s get into the dollars & sense of it all. Guess how much this miracle drug costs for one month’s supply? Seriously go ahead and guess. I’ll wait…

Yeah, so it costs $4,842.95. Not too high, right?? That is almost $60k per year. That is OUTRAGEOUS!!

What’s even more outrageous is the game one must play with the manufacturer and insurance companies. When I was approved by the insurance company for the drug, I was also approved for a manufacturer’s coupon. The manufacturer gives me up to $12,000 per year in coupons as long as I have private insurance.

I order the Rx, the insurance company applies the coupon, and I only pay $5. Lovely, right?  Well, there’s one problem and that is someone is paying for it…

How This Affects the Insurance

The coupons will cover you until you meet your insurance deductible. Good deal, right? There are two issues with this and the latter one is what concerns me most.

Firstly, insurance companies are doing something called true payment processing. They will only give members deductible credit if they actually pay for the drug themselves. Coupons don’t count towards deductibles. Fair enough.

There is a workaround, though, and it was explained to me by the manufacturer. All I had to do was pay the full cost of the drug, submit my receipts to the rebate program (manufacturer), and be reimbursed for all by $5. I tested it and it worked. Additionally, I got deductible credit for this.

The word on the street is that the insurance companies are onto this game and will be figuring out how to not give deductible credit for such episodes. This game will keep going on and on…

Not that I typically feel bad for the insurance companies, but I can see they are the ones getting the raw end of the deal here. Think about it – the manufacturer gives you a coupon and then sticks the insurance company to cover this drug for the rest of the year.

Affordable Care Act

When the Affordable Care Act was passed, small groups (under 50) were forced to go on community-rated plans. Exceptions were made when President Obama said, “if you like your current plan, you can keep it.”  Insurance companies allowed groups to stay on their old plan and called it grandmothering.

However, any new plans had to be community rated which meant the policy could not be rated based on risk. Isn’t that how insurance works??? Anyway, they could only rate groups on the following:

  • Age of members
  • Service industry code
  • Zip codes
  • Smoking status

Insurance companies had no idea what kind of risk they were getting so they raised their rates. The Affordable Care Act turned out to not be so affordable.

Loopholes

When rules are made, people find loopholes. Insurance companies found creative ways, at least here in Ohio, to underwrite risk again. Multiple Employee Welfare Arrangement (MEWAs) and level funded plans emerged in the market place and were approved by the Ohio Department of Insurance.

Don’t worry about exactly what these plans are (or look them up if you must) but just know that it’s a way for insurance companies to underwrite risk again.

With the emergence of these plans, competitive rates came back around!!

My Companies Insurance Plan

The small company I work for has a medically underwritten MEWA plan with attractive rates. We bought a high deductible plan ($6,550) but some of that is funded by my employer. I’m on the hook for the first $1,350.

I actually met my full deductible ($6,550) early on this year because of a little medical mishap. That being said, I can fill Humira all year long and pay nothing. What is so bad about that?

I will wreck our policy and cause mine & my colleague’s premium rates to drastically increase next year.

My single premium for this policy is $361.84 (which is paid 100% by my company). Let’s see how this shakes out for the insurance company.

Bottom line – the insurance company ends up paying out way more than it takes in. I know that this is what insurance is for but this is the curse of me knowing too much. I don’t want to wreck our policy.

My conundrum is that I want to continue to take this drug and preserve my future. What’s a girl to do?

Other Countries

Here is where I get really mad about this stuff. I saw my rheumatologist this week and told him I need an alternative. He shared this article with me from the New York Times:

Anger Over High Drug Prices in U.S.

That title basically sums up how I feel. In case you don’t feel like reading it (though you should it’s short), let me share a little paragraph from it:

“Top drugs, no matter how profitable to start, are routinely increased in price up to 20 percent annually in the United States. A patient could fly first class to Paris, stay at the Ritz, dine at a top Michelin restaurant, buy A one-year supply of Humira at local prices in France, fly back home and finish with enough profit to hire a registered nurse to administer the injection every two weeks.”

Um, whaaat?!? There is something very wrong here.

Additionally, we googled the average prices of Humira in the world. We found some stats from 2015 which shows South Africa as the country with the lowest costs.

Medical Tourism

This brings me to considering medical tourism. The challenge I forsee currently is that Humira needs to be refrigerated. I’m not quite sure how I’ll get past customs with a year’s supply of Humira on ice.

Anyway, I’m investigating it and my doctor encouraged me. Additionally, he joked that I needed to take him with me wherever I go. Travel reward miles anyone??

I’m going to doing some research and then my boss & I will work out some kind of arrangement. If  I can figure out a way to make this work and preserve our policy, it’ll be a win/win.

I’m all about thinking outside the box so I consider this a fun little experiment.

Going to the Foundation

I realize there is an incredible amount of research behind these miracle drugs. Additionally, I recognize they need to be paid. However, with the drastic disparities in costs all over the world, I see that there is a BIG problem here in the U.S.

Before I explore medical tourism, I will approach the Humira foundation to see if I can be approved for some type of discounted program outside of my insurance. I’d like to think there is some altruism behind the creation of this drug and they’d want to help me. Furthermore, it’s in their best interest in me being a continuous customer.

We’ll see if anything turns up here. Doubtful but worth asking.

Closing Thoughts

It’s incredibly frustrating to find a solution for a condition but then to be faced with the outrageousness of it all. I’m writing this as I imagine there are others who’ve been faced with high-cost prescriptions and similar frustrations.

My doctor said something that really stood out to me – the most important thing is my health. He said everything else really doesn’t matter if we don’t have our health. How can I argue that?

I’m going to embark on this experiment but if nothing really pans out maybe I’ll be forced to just take it as it is. However, it cannot hurt to try. Things don’t really change if we never challenge them, right? I’ll share my progress and results with you right here on my blog so stay tuned.

Have you experienced outrageous costs with your healthcare? Would you be willing to consider medical tourism?

 

15 thoughts on “The Astronomical Cost of Prescriptions in the United States”

  1. Deanna,

    You’ve hit upon a huge problem in the U.S. for sure. Who doesn’t want healthcare for all. The ACA was supposed to be a step in the right direction. As you aptly point out, though, parts of it are a train wreck.

    Some very smart people made some gross miscalculations on how insurance companies price risk. You can’t dictate that to satisfy your desires to have a national plan. Rather than work together on a solution, everyone fought to protect their own interests. That’s fair enough. Sadly, your story and hundreds of thousands of others indicate they failed.

    You have insurance. Others with chronic diseases who don’t are left out. I applaud you for taking the stand you are. It’s a credit to who you are as a person. We could probably count on one hand the number of people across the country who would be concerned that their medical situation would impact the cost of insurance for others in the company.

    I don’t know what the solution is but I share your concerns and applaud you for raising the issue in a very personal way.

    Well done. Good luck with the foundation and your quest to find a better way.

    1. Hey Fred, very well said. It so frustrating that the country is so divided when we could come together and focus on a solution.

      Thank you for your support. I don’t know what the solution is either but I’m convicted to challenge the current conventions.

  2. This is a very informative article that provides a lot of insight for people who struggle with this issue or just observe it from afar. Thanks for providing examples of your personal experience. It sounds so annoying and completely unnecessary when other countries can figure it out! I think it is very difficult for families who rely on prescriptions to project a budget into the future. That is not humane. We all want to build a little control into our lives. This is one area where people should not have to think about relocating in order to have their basic needs met. What a mess!

    1. Hi Michelle, I find I am best at educating through personal stories. You are exactly correct it’s so annoying!

      Thank you for comment & support 🙂

  3. You are an incredible human being with extreme perseverance. I know God will provide a way for you to access this much needed medication. And your doctor is spot on, everything else doesn’t matter if you don’t have your health. Brilliantly stated.

  4. As a registered nurse in an area where many of my patients have been diagnosed with chronic illnesses such a COPD, heart failure, kidney disease and diabetes, amongst many others, I see the daily battle people have with the cost of medications. Unfortunately, lots of our patients continue to come back to us admission after admission because they are “non compliant” with their medications. The hospital where I work is in a very low socioeconomic area where many people struggle to pay rent. It always breaks my heart when I know a patient is labeled as “noncompliant” because of their financial situation. It makes the patient seem difficult, or makes providers feel that “they just do it to themselves”, when really they are just deciding if they should spend their money on insulin or the electric bill. Then in return, many insurance companies have trouble supporting patients because they are “noncompliant”. We have access to the best healthcare in the world however our nation is sicker than ever because it seems that health = wealth. I 100% understand what you are saying. You have the opportunity to decrease your symptoms, increase your quality of life, and slow the progression of your disease however you have to jump over barrier after barrier. The model that other countries have is shown to work, not only with healthcare, but look at their cost of the higher education system as well. Great article to bring awareness to the situation!

    1. Wow, Rebecca, what a powerful comment! You certainly see a whole other side of this problem. How very sad that these patients have to decide if they should use their money to keep the lights or take their medication. Ugh! “We have access to the best healthcare in the world however our nation is sicker than ever because it seems that health = wealth.” Very, very profound but sad statement that describes the state of affairs in this country currently.

      Thanks for your support.

  5. I feel for you, Deanna. I work in health care in Australia – Humira is covered under our PBS (Pharmaceutical Benefit Schedule) which means you will pay $40.30 for a general patient (ie no concession benefits such as being on a pension) or $6.50 for a concessional patient. The federal government covers the balance ie tax payers ultimately pay for it. The issue in Australia is that very expensive but life saving drugs may not make it onto the PBS then patients will have to pay privately for them. With our aging population, the healthcare bill is increasing rapidly.

    Worse case scenario – emigrate to Australia – happy to welcome you here 😉 Seriously.

    1. Woah, that is 99.999% below the cost in the U.S.!! Understandably the tax payers ultimately pay for it in higher cost of living.

      Immigrate to Australia…hmm, sounds intriguing.

    2. I just listened to a NPR podcast this morning where they talked about the Australian healthcare system as a really interesting hybrid of a government funded plan as well as some private competing plans. They sited that 47% or Australian’s purchase the private plans. Does that sound correct?

      1. We have Medicare – universal health care – not income tested. Anyone (not overseas visitors) can attend a public hospital and be treated free of charge. Doctors can choose to charge just the Medicare rebate to them or charge an extra fee. Most medicines are covered under the PBS where there patients pay a co payment but there is also a safety net – in a calendar year, if you spend $xx, you will get a concession card which means your copayment is less OR if you are a concessional patient to begin with, you don’t have to pay any co payment. (There are some exceptions)

        Then we also have private health insurance and private hospitals. The government has been encouraging us to take up private health insurance as a way to reduce Medicare costs ie theoretically, if you have private health insurance, you should go to a private hospital instead of a public hospital. If you are a high income earner (more than $90000 for individual) and you don’t have private health insurance, you get taxed an extra 1% on top of the 2% Medicare levy paid by most people. There are other incentives to get private health insurance so 47% figure probably right.

        Private health insurance gives you peace of mind and extra choices, if you can afford it. For example, you need a knee replacement – the public hospital will put you on a waiting list for elective surgery – you may wait months and/or it becomes an emergency and you get bumped up the list. If you have private cover, you can get it done tomorrow if your surgeon can fit you in and the private hospital has a bed.

        But it is more complicated as you can still be treated at a public hospital as a private patient. Was just reading about how public hospital staff are pressuring patients to use their private health insurance so the public hospital can be paid more for the procedure/ hospital stay. Which will bump up premiums at some stage.

        It is not a perfect system but I think better than the US

        1. Thank you so much for explaining all of that! I’m sure there is not perfect system out there but, yes, Australia’s definitely sounds better than the U.S.

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