New Drug Prices Soar To $180,000 A Year On 20% Annual Inflation

New drug prices soar to $180,000 a year on 20% annual inflation |  BenefitsPRO

Source: BenefitsPRO, by Robert Langreth

While gasoline and food prices soar, few products rival the inflation in prices on newly launched prescription drugs, according to a new study.

The median launch price of a new drug in the US soared from $2,115 in 2008 to $180,007 in 2021, a 20% annual inflation rate over the period, researchers at Harvard-affiliated Brigham and Women’s Hospital in Boston found. Even after adjusting for factors such as drugmakers’ focus on expensive disease categories like cancer and estimated discounts that manufacturers give some purchasers, the annual inflation rate in launch prices over the period was still almost 11%.

Drug companies regularly introduce new medicines that aim to improve upon the efficacy or tolerability of existing treatments. While public attention has focused on year-to-year price hikes for existing prescription medicines, the study indicates that soaring launch prices also contribute to rising costs.

Over 47% of new drugs introduced in 2020 and 2021 cost more than $150,000 per year, compared to just 9% of new drugs from 2008 to 2013, the researchers found. The study, published in the JAMA medical journal, is based on an analysis of annual list prices of 548 drugs launched between 2008 and 2021 and uses price data from SSR Health research firm. The analysis of discounted prices was based on a smaller subset of 395 drugs.

“The trend in prices for new drugs outpaces growth in prices for other health care services,” the researchers concluded in the study.

No-Exam Life Insurance Policies Soar in Popularity as Prices Drop to All-Time Lows

LifeQuotes.com has good news for those who want to skip the traditional medical examination: An increasing number of highly-rated life insurers now offer no-exam underwriting up to $500,000, which dramatically simplifies and speeds up the purchase process for life insurance shoppers. Some no-exam plans offer instant-decision underwriting, depending upon the applicant’s age and state of residence. LifeQuotes.com founder and CEO, Robert Bland said, “A sea change of product improvement is under way in the U.S. life insurance market, and the news could not be better for middle market consumers. More and more life insurers are adding no-exam plans up to $500,000 that offer instant underwriting at unheard-of rates, which puts high quality life insurance within reach of every American adult who has dependents and a need for life insurance.” Rob Goss, executive vice president said, “The new generation of no-exam plans offer a full suite of initial rate guarantee periods, typically ranging from 10 years to lifetime and there is very competitive pricing available for individuals who have non-life threatening health conditions.” Underwriting for most no-exam plans involves e-signatures and/or recorded telephone interviews. The no-exam insurers typically require U.S. citizenship, a valid Social Security number, and a valid U.S. residence. In some cases, coverage may be available to U.S. residents who are temporarily living abroad.

2013 Long Term Disability Claim Payments Soar

Disability claims payments totaled $9.8 billion in 2013, a 1.6% increase over 2012, according to the Council for Disability Awareness (CDA).  In addition, more employers (214,000) offered long term disability benefit plans in 2013 than in 2012, yet the number of insured people fell 1% to 32.1 million — a decrease that may reflect the trend toward more voluntary/employee-paid disability benefit plans in which not all eligible employees enroll. CDA President Barry Lundquist said, “Despite increased consumer confidence, many employers and wage earners seem to have adopted a wait-and-see attitude toward benefit expenditures, a possible result of economic uncertainty and the fear of continually rising healthcare costs. It is a concern that, while more employers offered long-term disability benefit plans in 2013, fewer workers are actually protected. More and more employees are becoming responsible for making their own benefit decisions, so it’s critical to educate them about their risk of an income-interrupting illness or injury and the consequences of losing their paycheck. If our education efforts in this area are ineffective, we can expect declining numbers of employees with protected incomes in the years to come.”
The following are other key findings for 2013:

• Women accounted for 56% of new disability claimants approved by CDA member companies.
• The average claimant age exceeded 50 for the first time. Claims for those age 50 and older have been increasing consistently, mostly driven by claimants over age 60. Yet, more than four in 10 new claimants were in their 40s or younger.
• Musculoskeletal system/connective tissue disorders remain the leading cause of new disability claims, followed by cancer, injuries, cardiovascular/circulatory disorders and mental disorders.
• The total number of existing claimants who received disability payments fell 3% to 653,000.

For the second year in a row, new disability claims declined after increases in 2010 and 2011. The 5.7% decrease in new approved claims in 2013 is a result of fewer claim applications received, which is one indication of an improving economy. The number of disabled workers receiving Social Security Disability Insurance (SSDI) payments last year increased 1.3% to more than 8.9 million, which is the slowest growth rate in over a decade. To get a copy of the 2014 CDA Long Term Disability Claims Review, visit www.disabilitycanhappen.org.

LTC Costs Expected to Soar in California

California’s elderly population is expected to expand 44% by 2023, and the total cost of care is projected to increase 88% in the next decade, according to a study by the Univ. of California, Berkeley. Demand for long-term care services and support is expected to grow — particularly since those approaching retirement age report poorer health than those born before them. Projected increases in demand for long-term care suggest that
California seniors will not be able to get the care they need or will face delays in getting care. To get the study, visit http://www.rureadyca.org/sites/default/files/images/economic_study_11-7-2013_for_web.pdf.

Individual Rates to Soar In California

soaringhealthcostsExpanded enrollment of a sicker population will drive up rates for individual health plans in 2014, according to a study by Milliman for Covered California, the state’s health exchange. The average premium increase will be an astounding 30.1% for people who make too much to receive the subsidy (more than $93,700 for a family of four or $45,960 for an individual).

However, Californians who will qualify for the highest premium tax credits, due to their income, will see an average drop of 85% in what they pay for health coverage. Depending on the individual’s choice of health plan, this premium tax credit could cover a higher percentage of the premium. There are 1 .6 million people uninsured and eligible for subsidies. Many of them could have 100% of their premiums covered through the Affordable Care Act. Those who make less money will be eligible for larger federal tax credits to make their health care more affordable. Households earning from 138% to 250% of the federal poverty level will likely see an average drop of 85% in what they pay for health coverage. Households earning 250% to 400% of federal poverty level will pay on average 45% less, for more coverage with lower copay and deductibles, than what they would have paid for an individual plan in 2013. The hope is that, in future years, Californians will see decreases in their health care costs as they no longer pay for the burden of the millions of uninsured and benefit from improvements in how care is delivered, according to Covered California.

Last Updated 06/29/2022

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