Drug Costs and Their Impact on Care: Insights from Medicare Patients and Providers

Introduction

Prescription drug costs are a barrier to care for many patients, but especially so for the nine of 10 Medicare beneficiaries who report taking prescription drugs regularly.¹ In fact, 14 percent of beneficiaries age 65 or older say they skip taking or sometimes do not even fill their prescriptions because of the expense.²

Policymakers name prescription drug costs as a top issue of concern for their constituents, and both federal and state officials are interested in lowering costs for Americans. The Inflation Reduction Act of 2022 included multiple provisions aimed at making drugs more affordable and accessible for Medicare beneficiaries, including a $2,000 yearly limit on beneficiaries’ out-of-pocket costs for Part D prescription drugs. Understanding patient and provider experiences with drug costs could help policymakers further promote more timely and affordable access to medicines.

To get a better sense of patient and provider perspectives, we partnered with public opinion research firm PerryUndem and convened 10 focus groups: eight with Medicare beneficiaries and two with providers from a variety of specialties. The participants represented a diverse set of ages, genders, races, ethnicities, and geographic locations. They shared their experiences with prescription drugs and their strategies for accessing and affording their medications. (For focus group details, see “How We Conducted This Study.”) Below we present key themes and beneficiary insights from the focus group discussions.

Focus Group Findings

Prescription Drugs Are Essential to Many Beneficiaries’ Well-Being

Many Medicare enrollees described their need for prescription drugs as nonnegotiable — even a matter of life and death — particularly for treating chronic physical and mental illness. While many said they would prefer not to take any medication, they acknowledge the important role prescription drugs play in their health and quality of life, especially as they have aged and have had to rely on them more. They also view having access to prescription drugs as especially important.

With Costs Top of Mind, Patients Use Several Strategies to Save Money on Medications

While most Medicare beneficiaries can manage their drug costs over the long term, many still go through periods where access and affordability are an issue, especially those on multiple medications or high-cost branded drugs.³ Even if focus group participants didn’t currently struggle to afford their drugs, they worried that they might in the future depending on a new diagnosis or life event that required new medication. When pricing issues arise, patients will use a variety of strategies to ensure access to the medications they need and to lower out-of-pocket costs.

Generic Drugs

Almost all patients reported relying on generic drugs at some point and had very favorable opinions about them. Their primary concern was whether the drug works, and largely believed that generics worked as well as their branded counterparts. Overall, they considered generics the cheaper and better alternative, trusting their doctors and pharmacists to maintain the quality of their care. Some even proactively asked their providers if a generic alternative was available. Most participants reported nominal or no cost sharing for their generic drugs.

Reviewing Formularies

Participants were also attuned to their formularies, which are lists of prescription drugs approved for coverage by their plan. Patients reported checking their plan formularies each year during open enrollment to understand if their drugs were covered and what their cost sharing would be. While other factors also contributed to plan selection (such as whether their primary physician was in their plan’s provider network), prescription drug coverage was also a factor that many mentioned. For patients on name-brand drugs, this was a bigger factor. Yet most participants reported good coverage of their generic drugs for little cost.

Drug Discount Programs

When patients experienced cost-related problems with their drugs, a popular workaround was using online discount pharmacies like GoodRx or Mark Cuban Cost Plus Drug Company, either of which may provide lower-priced medicines than Medicare prescription drug plans.⁴ Patients learned about these alternatives from their friends and family as well as their physicians, and those who had used them reported good experiences. Several participants who were not familiar with these companies reported significant interest in learning more and seeing if they could save money by using them.

Delaying or Forgoing Care

In some cases, cost-related problems led patients to delay filling their prescriptions, stretch them out to make them last longer, try over-the-counter medications, or look for alternative sources for their medications. Any of these actions can carry serious health risks.

Many Patients Rely on Their Regular Providers to Help Them Navigate Drug Cost Issues

Across our focus groups, many Medicare enrollees spoke of their trust in their providers to help them find solutions to high drug costs. While physicians were the most common providers participants spoke to about their prescription drug costs, some beneficiaries also reported longstanding relationships with their local pharmacists, who were considered a go-to resource for these issues. Participants preferred relying on providers, whether physicians or pharmacists, with whom they had developed relationships over long periods of time and who understood their specific needs.

In contrast, Medicare enrollees in these focus groups said they were more cautious about taking advice about managing prescription drug costs from physicians treating them during a hospital stay or specialists they see only occasionally. Regardless, most patients were open to providers discussing costs during health care visits, no matter their relationship. They felt positively about these discussions — many focus group participants said it shows that their providers care. At the same time, several focus group participants said while cost remains a primary concern, obtaining the “right” drug also remains the top priority.

Providers See Cost as a Major Issue Driving Medication Compliance

We also spoke with providers to understand their impressions of how drug costs affect access to medications and the provision of care. The physicians said Medicare patients are feeling overwhelmed in their efforts to afford medications and are increasingly mentioning costs as a concern during office visits. As a result, providers and their staff spend more time helping patients address costs. At the same time, some providers consider cost a determining factor in whether patients will follow treatment plans that involve prescription drugs. Some also noted that middle-income Medicare patients who are not able to access the protection of Medicaid coverage or low-income subsidies, which reduce premiums and copayments for patients, are the most likely to bring up cost as an issue. Ultimately, these cost issues affect compliance with the prescribed drug protocol.

Providers Are Conflicted on Whether Their Role Should Involve Drug Cost Counseling

Many providers agreed they feel an obligation to help their patients navigate drug costs. When possible, these providers said they try to find medications that are covered by Medicare and prescribe generics whenever possible to keep drugs affordable for their patients. When cost barriers arise, they will explore alternatives so patients can afford their medications. Some providers discussed how an electronic health record (EHR) that has real-time cost data was helpful to support patient cost navigation. Providers who had accurate, up-to-date drug cost data through their EHRs were most comfortable and felt most effective addressing patient cost concerns.

Some providers saw factoring cost into prescribing decisions as an essential part of patient care. Yet others felt that it was too big of an issue for them to address appropriately and they didn’t have the knowledge, time, or resources to manage cost considerations effectively. Some thought that the provider’s role with regard to cost of care has more to do with billing and prior authorizations.

Some providers also felt uncomfortable considering cost in their treatment decisions and worried that patients would feel they weren’t getting the best care. These providers spoke of cost discussions as one of many systemic problems that negatively impact their relationship with patients. Additionally, those who didn’t have real-time formulary and cost information in their EHR or found the data to be out of date or incorrect felt they could not have effective cost conversations.

Conclusion

Patients and health care providers are increasingly having frank discussions about drug costs during care visits — sometimes looping in pharmacists as well — and working together to navigate alternative paths to getting needed medications. Still, some providers are reticent to bring up the cost issue. In the coming years, it will be important to understand the impact of Medicare’s new price negotiations, the expansion of the low-income subsidy, and the cap in catastrophic costs on patients’ ability to afford their medicines. Efforts to boost competition, such as patent reform and accelerating generic and biosimilar drugs to market, also could improve patient affordability.

Our focus group findings suggest that having affordable drug pricing and an assurance that prices will be predictable month-to-month could alleviate some of the concerns that Medicare beneficiaries have. Addressing these issues could also improve patients’ adherence to needed medications.