The Dysfunctional Drug Discount System’s Serious Implications on Patient Health

Over 66% of Americans take prescription medications, many of whom are elderly or individuals with chronic diseases such as diabetes, hypertension, or high cholesterol. However, 9 million adults either do not take their prescribed medications, take smaller amounts, or delay refills due to steep drug prices. Without access to affordable medication, patient health is declining and the healthcare system is paying the price. 

Within the last two decades, the prevalence of chronic disease in the U.S. has skyrocketed by 7 to 8 million people every 5 years, costing the U.S. medical system more than $1 trillion every year. The rate of type 2 diabetes has increased by almost 20% over the last decade, while deaths due to chronic kidney disease increased by 50%. Chronic diseases are on the rise, and the current healthcare system is ill-prepared to answer for a growing patient population suffering from one or more chronic, high-touch disease states. 

Drug discount programs, including the 340B Program, which nearly half the hospitals in the U.S. participate in, are designed to allow hospitals that serve a large demographic of poor, uninsured, or underinsured patients to purchase medications at discounted prices. Despite their intent to help patients afford medications, the current system is inefficient and vulnerable to abuse, providing little benefit to patients. With the direct negative effects on patient health, the system needs to be reformed to make medication accessible and affordable for everyone.

The problem with the current drug discount system

The current drug discount system is so disjointed and inefficient, savings are rarely passed down to patients. Due to the lack of a centralized data bank or reporting system, it is difficult for hospitals to track and manage discounts or ensure compliance within multiple complex programs. Especially within smaller covered entities (CEs), maintaining compliance can be burdensome, resulting in a loss or lack of time and resources to dedicate to helping patients see more savings.

On the other hand, for drug manufacturers, the absence of transparent data sharing robs them of the necessary decision-making information to plan for the future and serve patients properly. The lack of transparency also extends to patients. When patients enter 340B hospitals, they rarely know the extent of the discounted prices they are supposed to receive. Because this information is not tracked nor disclosed to patients, savings often get redistributed back to the hospital and its vendors.

As a result, patients are not benefiting from the deserved discounted costs these programs promise, which decreases adherence to necessary medications and treatments, which can lead to worsening conditions and outcomes for vulnerable populations.

The direct effects on patient health

Put simply, when patients do not take their medications, their health conditions worsen and inadvertently cost both the patient and the whole health system more expenses in the end. For example, 1 in 6 of the 20 million U.S. adults with asthma cannot afford their medications. 18% of those with asthma said the high cost of medication led them to skip or delay treatment. Skipping medication increases the risk of adverse events such as asthma attacks, increasing the chance of asthma-linked ER visits by 60%. Not only does this affect a patients’ overall health, but avoidable hospital visits cost the healthcare system billions of dollars each year.

Even for those the system is specifically targeted to help, outcomes fall short. For the 98.9% adults over 65 who qualify for Medicare coverage, and are meant to benefit from the drug discount systems, 4% cannot afford their prescriptions at all. 3% skip doses, delay filling prescriptions, or take smaller doses than prescribed to cut back on costs. Heart disease primarily affects older adults, with 82% of those who die from it being 65 or older, and is the leading cause of death in the U.S. Yet, one in eight who suffer from the disease cannot afford their medication.

Overall, when patients do not or are unable to manage their conditions by taking medications as prescribed, health conditions can worsen, further burdening patients and the healthcare system. Diabetes, for example, is a chronic metabolic disorder often managed by oral or injectable medication. If left untreated, it can progress into more serious and costly conditions like heart disease, kidney disease, and even nerve damage that can lead to amputations.

Reimagining a more equitable system

The industry as a whole needs a single, transparent way to track discounts, maintain proactive compliance, and report discount program utilization, if it hopes to provide patients with the benefits and savings that drug discount programs promise. Technology and data sharing capabilities can help organizations minimize human error, ensuring patients receive affordable medications without excessive and time-consuming paperwork and record-keeping. Technology can prevent duplicate discounts that often prevent manufacturers from providing optimum benefits to patients.

The current drug discount system is failing vulnerable patients – those it was designed to help. While well-intentioned, the savings these programs promise rarely trickle down to patients. With limited options, uninsured or underinsured patients are unable to effectively manage their conditions, leading to increased complications that add to financial pressures on them and on the medical system. The system is in dire need of reform to improve the health and well-being of the country.

Photo: Talaj, Getty Images

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