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Americans Skimp on Prescription Drugs to Save Money

Health Letter, October 2023

By Azza AbuDagga, M.H.A., Ph.D.

Image: Tatiana Popova/Shutterstock.com

U.S. spending on prescription drugs has been growing at a staggering rate. In 2021, this spending reached $603 billion before accounting for rebates. In contrast, the inflation-adjusted corresponding spending on prescription drugs was $520 billion in 2016. At least 70% of this spending for both years has been on retail prescription drugs. Moreover, the growth in prescription-drug cost is largely driven by increased spending per prescription rather than an increased number of dispensed drugs.

Since the 1990s, the United States has consistently spent far more on prescription drugs on a per capita basis than other developed countries, although rates of drug utilization in the United States are similar to those in other countries. For example, U.S. prescription-drug prices in 2018 were 2.6 times higher than those for other countries that are part of the Organisation for Economic Co-operation and Development, after accounting for rebates and other discounts.

Despite this exorbitant spending on prescription drugs, many adult Americans (aged 18 to 64 years) reported not taking their medications as prescribed to reduce cost, according to a recent report by the Centers for Disease Control and Prevention (CDC).

The CDC report

Using 2021 data from the National Health Interview Survey (NHIS) — a nationally representative household survey of civilian noninstitutionalized Americans — the CDC report estimated that, of the 60% of adult Americans who took at least one prescription drug in the past year, 9.2 million (8%) did not take their medications as prescribed to save money. Per this report, the strategies used to cut medication costs involved skipping entire doses, taking less than the prescribed dose or delaying filling a prescription.

The report also found that, although there were no differences between various adult age groups in terms of not adhering to their prescribed medications due to cost, slightly more non-Hispanic Black adults (10%) than non-Hispanic White adults (7%) did not adhere for this reason.

Comparable percentages of adults with private (7%) and public (8%) prescription-drug coverage did not adhere to their prescribed medications to reduce costs. In contrast, 18% and 23% of those without prescription-drug coverage and of those without health insurance, respectively, did not take medications for this reason.

Of adults with disabilities, 20% did not take their medication as prescribed due to cost, compared with only 7% of those without disabilities. Likewise, a higher percentage of adults who rated their health status as fair or poor (18%) than those who rated their health status as excellent, very good or good (6%) did not take medication as prescribed to save money.

Other evidence of cost-related non-adherence

The findings in the CDC report are similar to those from two other recent studies. The first study was conducted by researchers at Harvard Medical School, the City University of New York Hunter College and Public Citizen and analyzed 2021 NHIS data. It estimated that 1.3 million Americans rationed insulin last year due to its high cost. This astonishing number represents about 17% of adults with diabetes. This study — like the CDC report — showed that, although medication rationing was most common among adults without health insurance, it was also common among younger adults and those with private coverage.

The second study involved a nationally representative survey. The study showed that over 20% of senior Americans (aged 65 or older) reported cost-related medication non-adherence (defined as delaying prescription fills, not filling a prescription, taking less medication, skipping doses or using someone else’s medication) in 2022.

The collective findings of the CDC report and other recent studies demonstrate that many adult and senior Americans are unable to adhere to their prescription medications due to cost and highlight unacceptable gaps in medication access. These findings also exemplify the dysfunctional nature of the American health care system. This is because non-adherence to prescription drugs such as insulin can lead to preventable deaths. The Centers for Medicare and Medicaid Services has estimated that 125,000 deaths occur among individuals with chronic conditions each year because of medication non-adherence. Additionally, medication non-adherence wastes billions of dollars annually.

Policy implications

Unless action is taken, prescription-drug affordability is likely to continue to worsen in the coming years, limiting the access of even more people to the medications they need and putting more money into the pockets of large pharmaceutical companies and their allies. The financial burden of soaring prescription-drug costs is borne not only by patients who struggle to afford expensive medicines, but also by the public at large through higher out-of-pocket costs for drugs, health insurance premiums and taxes.

An essential approach to this problem is for the federal government to use its purchasing power to negotiate drug prices to bring costs down significantly, so that people in the United States would no longer pay more than people in other high-income countries do for prescription drugs.

The 2022 Inflation Reduction Act (IRA) included provisions that allow the Department of Health and Human Services — for the first time — to negotiate the prices for 60 prescription drugs covered under Medicare Parts B and D over the next four years, and up to an additional 20 drugs every year after that.

However, big pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America are suing to block price negotiations under the IRA. In August 2023, more than 70 groups and 150,000 individuals demanded that Big Pharma halt its lawsuits, and a number of organizations filed an amicus brief in support of the White House’s efforts in this regard.

As stated by Peter Maybarduk, director of the Access to Medicines program at Public Citizen, the IRA should be expanded and consistently improved, toward supporting affordable medicine for all [Americans], rather than limited or delayed to mollify pharma monopolists.”

Moreover, the United States should embrace a single-payer health care system so that the federal government can negotiate drug prices for more medicines and for the entire population, not just for a limited number of medicines for Medicare beneficiaries. No one should have to forgo a medication they need because of its cost.