In pursuit of affordable prescription medicine

In pursuit of affordable prescription medicine

By Grant Dattilo

At Dattilo Consulting, Inc., we are constantly looking for ways to reduce employers’ and employees’ health care spend. We are hopeful that President Trump’s September 2020 Executive Order will set off a wave of price reductions for most Name Brand drugs, which could translate into reduced health insurance premiums over time.

Americans want lower drug prices

Imagine your doctor prescribing you Myalept – the most expensive prescription medicine in the U.S. in 2020 – at a cost of more than $71,000 a month.[i] The drug is prescribed to individuals suffering from generalized lipodystrophy, a rare disease too complicated for this article to explain.

Then there is Zolgensma, a Novartis gene therapy for muscular atrophy approved during May 2019. At $2.1 million, in 2019 this specialty drug became the most expensive in the world.[ii]

Thankfully, few people will ever need Myalept or Zolgensma.

The three most commonly prescribed drugs in the United States are available as generics –Levothyroxine, Lisinopril and Atorvastatin. Thankfully, each of these three can cost less than $12 for a 90-day supply at some pharmacies.

Generally, the most expensive prescription drugs are “Name Brands” which still have patent protection. Oftentimes, Americans pay far more than individuals in other countries for the same “Name Brand” drugs.

President Trump, like presidents before him, has often railed against the high cost of prescription drugs. On September 13, 2020, Trump issued the “Executive Order on Lowering Drug Prices by Putting America First.”[iii] The Executive Order states:

  • Americans pay more per capita for prescription drugs than residents of any other developed country in the world. It is unacceptable that Americans pay more for the exact same drugs, often made in the exact same places. Other countries’ governments regulate drug prices by negotiating with drug manufacturers to secure bargain prices, leaving Americans to make up the difference — effectively subsidizing innovation and lower-cost drugs for the rest of the world. iii

With this Executive Order, Pres. Trump ordered the Secretary of Health and Human Services to study a way for Americans who receive their prescription drugs through Medicare or Medicaid, to purchase them at a price “…no more than the most-favored nation price.” iii In other words, for eligible individuals the price would be no greater than what foreign health systems are paying, using those lower prices to leverage better rates for Americans. The program is meant to:

  • … test whether, for patients who require pharmaceutical treatment, paying no more than the most-favored-nation price would mitigate poor clinical outcomes and increased expenditures associated with high drug costs. iii

The Executive Order does not directly address the prices paid by individuals with private or no insurance. However, since the federal and state governments, through Medicare and Medicaid, spend more on prescriptions than anyone with private health care would pay, it is expected that eventually, prices in the U.S. will drop, and as likely, foreign governments will need to pay more.

Big Pharma will continue to fight price-setting by any U.S. government. Frankly, having the government set the price would most likely lead to reduced research and development of new life-saving drugs. Government price-setting could also result in supply shortages.

At DCI we prefer full price-transparency and the private market to create affordable price points. However, given the disparity between what citizens of many foreign nations pay, and what we pay in the U.S., at the very least the private market needs to open up the marketplace beyond America’s borders, and make those prices fully transparent.





DCI-Clientserv is the sole owner of this information. No portion may be reproduced without express written permission of DCI-Clientserv.

Grant Dattilo