Address Prescription Drug Costs

Prescription Drugs

Issue: Increase prescription drug affordability and access. Support policies that improve the pricing, transparency, and affordability of prescription drugs. Oppose unnecessary restrictions on patient access, such as fail-first step therapy protocols.

Why Action is Needed

The cost of prescription drugs continues to rise, affecting access to life-saving treatments for patients who are unable to afford higher prescription and out-of-pocket costs, higher co-pays and more tiered drug pricing. More than 131 million Americans use prescription drugs with many facing the difficult choice of filling their prescriptions or paying for necessities; they may resort to cutting back or skipping doses of their medicines to save money, which can lead to more serious health complications.

As outlined in ACP’s 2019 position paper, the U.S. spends more on prescription drugs than other high-income countries, with average annual spending of $1,443 per capita on pharmaceutical drugs and $1,026 per capita on retail prescription drugs. In a 2021 study by the Rand Corporation, prescription drug prices in the U.S. average 2.56 times those seen in 32 other Organization for Economic Cooperation and Development nations. Pharmaceutical manufacturers have also employed various tactics to thwart competition, such as delaying the entrance of generics in the marketplace.

In addition to rising prescription drug costs, step therapy has been used by insurers resulting in patients not getting some of the drugs prescribed for them. Step therapy is an insurance protocol that requires patients to try and fail drugs selected by their insurer before the treatment prescribed by their doctor is covered.

ACP’s Position

In 2016, ACP published Stemming the Escalating Cost of Prescription Drugs: A Position Paper of the American College of Physicians, a series of recommendations to improve transparency, value, and competition for prescription drugs, with the goal of creating a sustainable and affordable prescription drug marketplace. In 2019, ACP published Policy Recommendations for Public Health Plans to Stem the Escalating Costs of Prescription Drugs: A Position Paper From the American College of Physicians, to offer additional recommendations for decreasing out-of-pocket costs for patients, enhancing the government's purchasing power, and addressing existing policies that add costs to the health care system. ACP’s recommendations include:

  1. Modifying Medicare Part D low-income subsidy program cost-sharing and copayment structures to encourage the use of lower-cost generic or biosimilar drugs.
  2. Capping annual out-of-pocket spending caps for Medicare Part D beneficiaries who reach the catastrophic phase of coverage.
  3. Adopting Medicare Part D negotiation models that would drive down the price of prescription drugs for beneficiaries.
  4. Repealing the noninterference clause, while also supporting an interim approach to allow Medicare to negotiate a limited set of high-cost or sole-source drugs.
  5. Supporting a public Medicare Part D plan option that allows Medicare to negotiate prices with drug makers.

ACP recommends that new policies should be implemented to prevent market manipulation, help lower-cost alternatives make it to the market faster, and ensure a robust and competitive market for generic and biosimilar drugs. ACP also supports policy requiring that all step therapy and medication switching policies aim to minimize care disruption, harm, side effects, and risks to the patient.

Call to Action

  • Support legislation requiring greater transparency in prescription drug price increases.
  • Support S. 652, the Safe Step Act of 2023, to address arbitrary step therapy protocols by providing an exceptions process.
  • Ensure that the Centers for Medicare and Medicaid Services implements regulations to fully reflect the requirements contained in the Inflation Reduction Act, including prescription drug price negotiations under Medicare Part D beginning in 2026.