The Real Price of Medications

People living in the United States have access to some of the best medical care in the world, from life-saving drugs to cutting-edge surgical techniques. But spiraling costs force many Americans to spend more on care and often receiving poor quality care for all the extra money spent.

Health care

February 25, 2019

A survey of variations in prescription drug prices

A Report by U.S. PIRG Education Fund
Written by Adam Garber, Lance Kilpatrick & Reuben Mathew, U.S. PIRG Education Fund

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High prescription drug costs are at the core of the problems Americans face in the healthcare system. Insulin prices have nearly doubled. In January of 2019, the prices on more than 250 prescription drugs increased by 6%. These increases on top of prices already higher than many other countries have contributed to 1 in 4 Americans on medication struggling to afford their prescriptions. Many are then forced to make tough choices that undermines their health: splitting doses, failing to take their medication, or otherwise rationing care.

And even when people can afford these extremely high prices, the drugs work no better than elsewhere. They aren’t getting healthier for paying more.

[Prescription price survey]

Our researchers called more than 250 pharmacies in diverse cities and regions across 11 states around the United States. During the calls, we asked pharmacists for the price uninsured or uncovered patients would pay for a number of medications that treat asthma, high blood pressure, diabetes, high cholesterol and other diseases. Here’s what we found:

Key findings

Our research found that common life saving medication prices varied greatly, even within the same state or city, undermining quality of care.

1. Prices can vary wildly – by as much as 900%

Most pharmacies offer a price 9x the cheapest available price for a medication nationally.

2. You can save big by shopping around

You can save hundreds or even thousands of dollars a year for many medications by shopping around.

3. Small pharmacies are cheaper than big pharmacies

Small and independent pharmacies often offer cheaper prices

4. Generics are often a better deal

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Before they reach you, medication goes through a complicated maze of pharmaceutical companies, middle-men and businesses. And at each step, more cost is added to the cost of life-saving medication without returning higher quality care to patients.

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Our recommendations

It is clear that if we don’t make meaningful reforms, patients will continue to see their health care lose value and harder to access. Fortunately, practical policy solutions will help reduce costs and drive patients and providers to use more high value and affordable drugs that deliver care at lower prices. We can do this through:

Comprehensive transparency

Prescription drug price transparency across the health care system as a foundation from which policy-makers can base further prescription price reforms and a way to help patients understand their costs.
Require insurers and pharmacies to provide prices for comparison online and within provider systems.

Price gouging protection

Creation of state boards of experts to examine prescription drug pricing (based on above transparency) and evaluate what are the best steps to reform the broken market.
Enacting laws that require notification of drastic price increases, require justification for that increase, and empower the state and federal governments to reject indefensible increases.

Encourage competition

Patent reform to increase the availability of generics and prevent abuses of the patent system.

Fixing healthcare system incentives

Responsible limits on pharmaceutical companies’ physician-targeted sales tactics

Prescription drug price transparency

Spiraling costs force many Americans to spend more on care and often receiving poor quality care for all the extra money spent. Call on Congress to pass comprehensive prescription drug pricing transparency laws.