Prescription Drug Prices Have Increased Nearly 40% Over the Past Decade

Rising Prescription Drug Costs: A Significant Burden for Americans

The cost of prescription drugs in the U.S. has surged nearly 40% over the past decade, greatly outpacing inflation, according to a new study by GoodRx, a drug savings company. The list price for prescription drugs has increased about 37% since 2014. While price hikes have slowed this year, they continue to be a major burden for many consumers.

Out-of-Pocket Spending

In 2024 alone, Americans have spent $21 billion on out-of-pocket prescriptions, which averages to about $16.26 per person. Tori Marsh, director of GoodRx research, notes that the challenge for most Americans is not affording high-cost drugs but rather routine medications for chronic conditions, especially when insurance coverage is limited or complex.

Insurance Coverage Challenges

Health insurance often covers medical expenses, but more costs are being shifted to consumers. GoodRx refers to this as the “big pinch” – insurance plans, both Medicare and commercial, are covering fewer medications and imposing more restrictions. About 54% of medications are covered by insurance under Medicare plans, but half of these come with restrictions like step therapy or prior authorization. Additionally, at least one-quarter of Americans have a prescription that is not covered by insurance.

Increasing Deductibles

The average deductible has nearly doubled over the past decade, rising from $917 to $1,644. This means consumers are paying more out-of-pocket before their insurance starts covering costs.

Efforts to Control Costs

Despite efforts by policymakers and pharmaceutical manufacturers to control rising drug prices, costs remain high. Legislative attempts to cap insulin prices and discount programs for expensive therapies have not significantly reduced overall drug costs.

Impact of Inflation

The increase in prescription drug prices is part of a broader trend of rising costs. Americans are dealing with high inflation, which has made everyday necessities like groceries, rent, and gasoline more expensive. Although inflation has decreased from a peak of 9.1% in June 2022, it remains above the Federal Reserve’s 2% goal. Prices have increased by 32% compared to a decade ago, and many families are still struggling to see significant relief. Grocery prices have risen by more than 21% since the start of 2021, shelter costs by 18.37%, and energy prices by 38.4%.

Burden on Lower-Income Americans

Price hikes are especially hard on lower-income Americans, who spend more of their limited income on necessities and have less flexibility to save money.

References

• GoodRx study findings: GoodRx
• American Medical Association statistics on supplement use: AMA
• Statista market projections: Statista

For more details, visit GoodRx.