Federal and state legislation aimed at capping cost-sharing would lead to higher premiums and skyrocketing drugs costs, according to a new policy analysis.
Arguing that existing cost-sharing techniques already lower the price of drugs by steering health plan beneficiaries towards generic medications, a report from the National Center for Policy Analysis (NCPA) says millions of Americans would be forced to pay more in indirect costs if more states shift towards caps. So far, eight states have passed legislation with co-pay or cost-sharing caps, and Democratic presidential nominee Hillary Clinton has proposed caps for monthly and annual out-of-pocket costs for prescription drugs.
The right-leaning organization, which promotes “free market alternatives to government regulation and control,” argues co-pay caps benefit just a small percentage of people, but would lead to premium hikes for all beneficiaries. The analysis notes that under the current system, generic drugs make up the majority of prescriptions at a lower cost. A recent study found that generic drugs are keeping drug prices stable, but they may not be enough to facilitate robust competition.
Brand name drugs and specialty medications represent higher expenditures but are required by far fewer people, NCPA adds. Furthermore, the current approach to cost-sharing prevents “excessive price hikes” and keeps premiums affordable.
“If policymakers are successful in their attempts to limit cost-sharing, you can bet there will be even more drugs with prices that reach the stratosphere,” the report states.
Although prescription drug costs are up since the implementation of the Affordable Care Act, out-of-pocket costs are down. Previous reports indicated that hospitals have been hit hardest by drug costs that rose 12.6 percent in 2014, and are expected to increase more than 7 percent annually through 2018.
Insurers and pharmacy benefit managers have already received growing public backlash, even as insurers argue that rising prescription drug costs have motivated higher premiums.