HHS: Prescription drug costs have skyrocketed in recent years

Americans spend more on prescription drugs than any other country, and the problem has only gotten worse, two new reports show.

From July 2021 to July 2022, 1,216 prescription drugs saw price increases that soared past the inflation rate of 8.5% for that time period, according to a report from the U.S. Department of Health & Human Resources, published last week. These drug prices rose by an average of 31.6%. The report was released shortly before a new requirement was enacted October 1 as part of the Inflation Reduction Act, making drug manufacturers pay rebates to Medicare if they increase prices for drugs in Medicare Part D past the rate of inflation.

Another report published last week by HHS examined trends in prescription drug spending from 2016 to 2021. It found that in 2021, the American healthcare system spent $603 billion on prescription drugs, of which $421 billion was spent on retail drugs.

“In recent years, prescription drug prices have skyrocketed, but thanks to the Inflation Reduction Act, America’s families will soon start seeing relief,” said HHS Secretary Xavier Becerra in a news release. “No one should have to choose between buying groceries or a prescription, making a home repair or going to the doctor, or splurging on a grandkid or seeking treatment.”

Additional findings from the two reports:

Increases in drug prices typically happen in January or July each year, but especially in January. In 2022, the number of increases for both of these months were higher than in years past. In January, there were 3,239 price increases for prescription drugs, compared to 3,164 in January 2021. In July, there were 601 price increases, whereas the year prior had 203.
The amount prices increased by were quite significant as well. In January, price increases from the year prior were about $150 per drug on average, a 10% increase. In July, increases were about $250 per drug on average, a 7.8% increase.
High spending is largely due to specialty drugs, which contributed to 50% of total spending in 2021, equaling $301 billion. This represents a 43% increase since 2016.
The drugs with the highest price change in dollar amounts were Tecartus (for B-cell acute lymphoblastic leukemia and mantle cell lymphoma) and Yescarta (for lymphomas), which both increased from $399,000 to $424,000, a 6.3% increase. Both of these drugs are by Kite.
Meanwhile, the drugs with the highest percentage price change were Fluconazole by Greenstone and Fluconazole by Bluepoint Labor, which both treat fungal infections. The Greenstone drug increased by more than 1,100% from $2 in 2021 to $28 in 2022, while the Bluepoint Labor one increased by more than 1,097% from $2 to $24.

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