Pharmaceuticals & Biotech

Working toward a comprehensive affordability agenda: How to end the drug price blame game

By Howard Deutsch, and Megan Sadiua

May 6, 2022 | Research Report | 8-minute read


Prescription drug prices and affordability have been a hot-button topic in the U.S. for decades. And, like any other hot-button topic, there are some axioms about drug affordability that are repeated so often that “everyone knows” them and they are assumed rather than demonstrated. For example, U.S. Department of Health and Human Services Secretary Xavier Becerra starts his “Comprehensive Plan for Addressing High Drug Prices” introduction with the simple declaration “Americans pay too much for prescription drugs.”


We also think we know exactly who is to blame for this state of affairs: the pharmaceutical companies that charge high prices. While there are plenty of places to point fingers, the public believes drugmakers are most blameworthy with 75% of respondents to ZS’s Patient Affordability Survey suggesting that drugmakers are at fault for high prescription prices. This far outstrips all other entities in our study.

The public and many policymakers have internalized a simple story:

  1. Many patients struggle to afford their prescription drugs.
  2. They struggle because drugmakers charge very high prices.
  3. Policy action to limit what drugmakers can charge would address this.

While this story is simple, it is also mostly wrong. The reality of drug affordability is complex. The prices drugmakers charge are only sometimes related to the issues patients face.


Efforts to address the very real struggles too many patients face must begin with a clearer understanding of the affordability landscape.


To understand what is happening “under the hood” with patient affordability, the ZS Research Center conducted a survey of 2,977 consumers in September 2021. All 2,977 consumers were asked a battery of questions regarding the perceptions of drug prices. For the 500 respondents who experienced affordability problems, we probed for specific details about their situations. We asked them to: name the most recent drug with which they had a problem, describe the nature of that problem and characterize the impact this difficulty had on them. We also asked them to provide the price they were asked to pay for the prescription and the price they would have been willing to pay.


In addition, we studied a patient claims data set from Symphony Health Integrated Dataverse (IDV®), which is an ICON plc company. The data, from   January 2016 through December 2019, was focused on all prescriptions that patients did not successfully fill at the pharmacy, either due to insurance rejection or patient choice. 

Affordability problems are highly disruptive

Twenty-five percent of the 500 respondents who experienced an affordability issue reported never taking the medication they were prescribed. Of those who did end up filling the prescription, 65% reported taking a week or longer to receive that medication. As one patient reported, “I eventually saved enough to fill the prescription, but I only use it when I have to, making it last longer.”

Consumers overestimate scale of affordability challenges

According to a poll conducted by the Kaiser Family Foundation, 24% of adults taking a prescription drug say they are hard to afford. This figure was cited by the Biden administration in their drug pricing materials. Consumer perception is quite different. In our survey, 62% of the 2,977 respondents expressed strong agreement with the statement “most of the U.S. population struggles to afford prescription medicine.” Among those who have not personally had those difficulties, 56% still expressed strong agreement with the statement.

Generic drugs account for half of the affordability problems

Generic drugs are often assumed to be inexpensive. It is therefore striking that in our survey, drugs with generic versions available comprised 52% of the cases where consumers faced affordability challenges.


This result was consistent with our analysis of prescription claims. Over 70% of all prescriptions that patients chose not to fill at the point of sale in 2019 were for generic drugs. There can be many reasons beyond affordability that result in a patient being unable or unwilling to fill their prescription. When we focused solely on higher-priced claims, we noted 50% of all unfilled claims with co-pays of at least $30 were for generic drugs. Forty-four percent of all unfilled claims of at least $50 were for generics.


Large differences between what patients were asked to pay for generic drugs and what retail pharmacies were willing to accept are the single biggest driver of affordability challenges patients experienced, accounting for about 40% of all such issues. Marketplace players like GoodRx and the new Mark Cuban Cost Plus Drug Company pharmacy have stepped in to

address this problem, but many patients with affordability issues are not yet successfully availing themselves of these offerings.

Why so many patients struggle with affordability

From a patient’s perspective, every affordability issue looks about the same. The patient receives a prescription, tries to fill it at a pharmacy, and determines it is too expensive. However, the specific reasons behind the scenes for this outcome can vary significantly. These factors fuel a blame game that characterizes much of today’s discourse on drug prices, costs and affordability. The reality is every stakeholder in the healthcare ecosystem is at least sometimes somewhat responsible for patient affordability problems:

  • The pharmaceutical industry sets list prices on branded drugs that often form the basis for patient co-pay levels. If their prices were lower, patients would often pay less.
  • Pharmacy benefit mangers (PBMs) manage and profit from the infrastructure driving drug manufacturers to charge high list prices with offsetting rebates rather than offering lower prices. They have also developed “innovative” methods to redistribute money from patients and drugmakers to plan sponsors and themselves. These methods are frequently opaque. 
  • Employers and other plan sponsors have, in an effort to reduce plan premiums, chosen to adopt various mechanisms offered by health plans and PBMs that shift the burden of payment onto patients, rather than onto the broader insurance pool. Tactics such as high deductibles, the adoption of co-pay accumulators, aggressive use of co-insurance for specialty medications and declining to share negotiated rebates with patients at point of sale all serve to make drugs more expensive for more patients than they should be.
  • Pharmacies often add tremendous retail markups on generic drugs, harming the uninsured or under-insured who may not be aware of available discount options.
  • The government allows each of the private sector players to act the ways they do. Further, the government has chosen a narrow definition of “essential health benefits” available at $0 co-pay that doesn’t include many prescription drugs that truly are essential.

In other words, every time one healthcare entity points the finger of blame at another healthcare entity over drug costs, they’re at least partly right! The extent to which those entities are responsible varies by situation.

Toward a comprehensive affordability agenda

Since the underlying reasons for drug affordability issues are multifaceted, there is no single simple solution that will address the real-world problems patients face. If we seek to address patient affordability comprehensively, reforms will be required that target each driver. What might comprise such a comprehensive agenda? Below, we summarize its core elements.

Benefit design reform

While deductibles are a valid tool for managing insurance premium levels, it is counterproductive to require patients to pay high costs to access many essential therapies. Some forward-thinking employers have recognized this and have adopted preventive therapy drug lists for conditions such as infections, hypertension and diabetes. Drugs in these categories are sometimes designated as low or no co-pay and are not subject to deductibles. Policymakers should consider extending the definition of essential health benefits as codified in the Affordable Care Act to include a broader set of treatments like these at a $0 patient co-pay, rather than leaving these choices to individual insurers. If we considered the drugs on this list to be “essential,” it would address 30%-40% of the affordability issues in our data.

Price reform

Our analysis found that if the makers of branded drugs lowered their list price by 50% it would improve all affordability issues by 13%. The impact may be modest for such a sharp reduction, but within the context of comprehensive affordability-based reform, pharmaceutical manufacturers will need to think about what constraints they may accept on pricing for the opportunity to both address patient burdens and increase sales volume to patients who will be better equipped to pay for their prescriptions. 

Co-pay reform

Following enactment of the Affordable Care Act, private commercial insurance plans were required to have a maximum annual out-of-pocket cap. However, costs in Medicare remain uncapped. Further, Medicare patients are ineligible for discount cards offered by branded drug manufacturers. Capping Medicare costs for patients, as contemplated by different bills in Congress, and allowing patients to benefit from co-pay discounts offered by drugmakers, will help many Medicare patients better afford their drugs. ZS found that allowing Medicare beneficiaries to use co-pay cards would address 5% of affordability issues.

Rebate reform

Branded pharmaceutical manufacturers negotiate substantial rebates off their list prices in many therapeutic areas with health plans and PBMs. Too often, however, those discounts and rebates don’t find their way to the patients. While PBMs offer plan sponsors the option to use negotiated rebates to offset patient costs at point of sale, very few plan sponsors choose to do this due to the increased costs for the payer. Policymakers should take that decision out of the hands of those sponsors so patient co-pays reflect the net prices realized by manufacturers. Enacting rebate reforms in Medicare and private insurance could address between 2%-5% of all drug affordability issues, according to our analysis.

Patients deserve comprehensive action on prices

In an environment where every stakeholder in the healthcare ecosystem bears some responsibility for the current state of patient affordability, it has been too easy to point fingers at others rather than coming together to formulate solutions on behalf of patients. What if instead, drug manufacturers, insurance plans and pharmacies could come together and align on a set of affordability-centered principles? What if policymakers moved beyond their narrow focus on branded drug list prices and looked at all the sources of affordability challenges? Only with comprehensive action across all the drivers of unaffordable prices will we ensure that whatever their medical need, patients can pay for the treatments their doctors prescribe. They deserve no less.

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