Retire Better: Rising drug prices continue to hit seniors

United States

Temperatures aren’t the only thing rising as we head into the dog days of summer. Drug prices are too, and they come just six months after most pharmaceutical manufacturers rang in 2021 with a prior round of price hikes. 

Here we are just a few days into July and price hikes averaging 3.6% have already been announced for 32 brand drugs, says GoodRX, a medical and healthcare services provider. For all of 2020, says the firm’s director of research Tori Marsh, prices were hiked for 67 drugs. 

“Every year, it seems like more drugs increase in [July],” says Marsh. 

Leading the pack here is the 9.5% price hike for Fintepla, an antiepileptic drug used to treat certain types of seizures, which is made by Emeryville, Calif.-based Zogenix, Inc.  ZGNX, -3.90% Perhaps the price hike is coincidental, but the drug received approval from the Food and Drug Administration (FDA) just last week. The list price? A whopping $ 96,000 per year. 

Also up sharply is Chlormethine, better known by its brand name Valchlor, which can treat Hodgkin’s disease and other kinds of lymphoma and leukemia. Manufactured in Ireland by Helsinn Birex Pharmaceuticals Ltd. and sold here by Helsinn Therapeutics, its price is up 7%. Three other drugs are all up 5%: Tavalisse (for patients with low platelet counts, made by Rigel Pharmaceuticals Inc. RIGL, -2.00% ), Isturisa (treats Cushing’s disease, made by Recordati Rare Diseases) and Xyosted (which treats among other things, inoperable mammary cancer in women, made by ANI Pharmaceuticals Inc. ANIP, -2.64% ). 

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The silver lining here, Marsh says in a blog post, is that “in general, drugs that increase in price are specialty drugs that few people take.” But that’s cold comfort for those who are affected, because “the majority of them were already expensive and only continue to increase in price.”

Also problematic here is the painful fact that many Americans who think they’re covered insurance wise for expensive drugs can still face huge out-of-pocket costs. Another GoodRX drug price tracker, public health researcher Amanda Brooks, writes that “many Americans enrolled in Medicare Part D will face high yearly out-of-pocket costs for some expensive specialty medications, which can total upward of $ 10,000.” 

Medicare Part D—also called the Medicare prescription drug benefit—is supposed to help Medicare beneficiaries with costs like these. But after studying the 20 most common specialty medications filled by Medicare Part D enrollees Brooks says that “on average the drugs will cost Medicare patients at least $ 3,000 annually in 2021, with one drug (Bristol-Myers Squibb’s BMY, +0.59% Revlimid, which can treat multiple myeloma) costing more than $ 17,000.” 

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“Insurance isn’t cutting it anymore,” Brooks writes, “especially for the millions of Americans that currently take a specialty medication.” 

In addition to insufficient insurance coverage, it’s also worth pointing out that these kinds of prices are growing faster than the overall core inflation rate, which is currently 3.8%. 

Seniors struggling to keep up with these kinds of problems—rising prices and insufficient insurance coverage—aren’t getting enough help from their elected representatives. In December 2019, the House passed a bill—the “Elijah E. Cummings Lower Drug Costs Now Act”—that would force drug manufacturers to pay a rebate to the federal government if drugs covered under Medicare Parts B and Part D rose faster than inflation. But it has gone nowhere in the Senate, thanks in part to heavy lobbying by—guess who?—drug manufacturers.   

For his part, President Joe Biden has brought renewed focus to the issue. In his 2022 budget proposal, he wants “reforms that would bring down drug prices by letting Medicare negotiate payment for certain high-cost drugs.” The White House claims that such a reform could amount to more than “half a trillion in federal savings over the next 10 years,” which could be passed along to seniors.

Biden also backs the House bill that has stalled in the Senate. But it has been eclipsed by bigger priorities like getting his $ 1.9 trillion American Rescue Plan passed, which was aimed at both containing the COVID-19 pandemic and helping the economy recover from its devastating 2020 downturn. 

Will helping seniors with soaring drug prices move higher on the Biden agenda? An infrastructure bill, dealing with China and other big items suggest that the answer is no.