UNH Healthcare Vitals: Medical Debt and the Rise of Rx Drug Costs
Did you Know?
Rapidly rising prescription medication costs are a major reason families experience medical debt. Most Granite Staters worry about being able to afford their prescriptions, yet efforts at the state and federal levels to address the problem are stalling. Three in four adults say there is “not as much regulation as there should be” when it comes to limiting prescription drugs prices.
Here is the problem
Policy makers and industry have struggled to ensure patients have access to life-saving drugs while keeping prices affordable, leaving the problems unresolved:
- Spending, demand, and prices for brand-name drugs have grown substantially.
- The patent system and FDA approval process allow for limited competition.
- The prescription drug delivery system lacks transparency for consumers, allows for price manipulation, and spends unnecessary dollars on ‘middlemen.’
- Compelling innovations have focused on high cost specialty drugs resulting in double-digit increases in spending.
The stakes are high – the biopharma companies reportedly spent over $372 million lobbying Congress and federal agencies in 2022, outspending every other industry – and this does not even include marketing costs.
What’s the Latest?
NH’s Prescription Drug Affordability Board Is Under Attack
In 2020, New Hampshire created the Prescription Drug Affordability Board (PDAB) in response to the escalating costs of prescription medications. Its primary goal is to investigate the rising impact of drug prices on health insurance plans for public employees.
Over the past decade, New Hampshire has experienced the advent of the lifesaving but high-priced antiviral drugs for Hepatitis C, cancer treatments, diabetes and obesity medications (such as GLP-1 drugs Wegovy, Ozempic and Mounjaro), and other innovative but expensive specialty drugs. Diabetic therapies, including GLP-1 drugs, have been the costliest drug class for the commercial population in the state. These trends are straining health plans across New England. As ne insurer noted, “The surge in spending is putting a heavy and unsustainable burden on our employer customers and members who are struggling to keep up with rising costs.”
The PDAB brings transparency to prescription drug use and pricing, exposing the access and affordability challenges faced by Granite Staters. The PDAB also works with stakeholders and agencies to recommend strategies to reduce the financial impact of escalating prices on state and municipal health insurance purchasers and their employees.
In it’s 2024 report, the PDAB examines the actual costs to NH caused by delayed competition from generics and biosimilars (including for drugs like Enbrel, the 7th costliest drug in NH public employee health plans), spending increases due to weight-loss/diabetes drugs, and the broader trends in prescription drug use and costs across the state. The PDAB explores Strategies to Reduce Public Expenditures through cost control measures that could save up to $6 million using Medicare Maximum Fair Prices as a benchmark and other purchasing strategies used effectively in other states.
Despite this progress, the PDAB’s authority remains under continuous attack, with legislation proposed to eliminate it altogether in 2025. Additionally, the board faces limited resources and restricted authority, further hampering its ability to protect NH consumers.
Federal Prescription Drug Cost Activity
Efforts to Protect Families from the Consequences of Medical Debt Are Threatened with the Potential Elimination of the CFPB
Two in three U.S. adults are concerned that a major health event could leave them in debt, according to a recent nationwide poll by West Health and Gallup. In response to years of pressure from healthcare consumers, the Consumer Financial Protection Bureau (CFPB) issued a final rule in January 2025 to protect people with medical debt. The rule prohibits credit rating agencies from including medical debt of most consumer credit reports. However, these protections have been put on hold by the current administration, and the CFPB itself faces the threat of elimination.
The Future of Medicare Drug Pricing?
Medicare is in its second round of drug price negotiations.
In the first cycle of negotiations, Medicare negotiated and reached agreements with participating drug manufacturers, securing lower prices for all 10 selected drugs effective January 1, 2026. “The new, lower prices range from 38 to 79 percent discounts off of list prices. In 2026, people with Medicare prescription drug coverage are expected to see aggregated estimated savings of $1.5 billion in their personal out-of-pocket costs.”
What will the new administration do? On January 17, CMS announced: “As the second cycle begins under the Trump Administration, CMS is committed to incorporating lessons learned to date from the program.”
PBM Regulation and Site of Service Reforms Stalled
The December stop-gap funding bill in Congress initially included bipartisan reforms to address Prescription Benefit Managers (PBMs). These reforms would have required PBMs to pass through 100% of their rebates to plan sponsors, curb spread pricing practices in Medicaid, and enhance reporting. However, these provisions were ultimately carved out of the final bill, leaving their future uncertain.
This all comes on the heels of two scathing reports from the Federal Trade Commission (FTC) on the drug pricing practices of “Prescription Drug Middlemen” (published in July 2024 and January 2025). The reports found that the “‘Big 3 PBMs’—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc. (OptumRx)—marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent” resulting in compounding annual growth rate of 21% for commercial claims over a 5 year period and 14-15% for Medicare Part D.” The three largest PBMs account for nearly 80% of the prescriptions dispensed each year. For further details, see Caremark Rx, Zinc Health Services et. al, In the Matter of (Insulin), Sept. 2024.
What does this mean for New Hampshire?
Prescription drug costs remain a significant driver of healthcare spending in New Hampshire and a major concern for both consumers and employers.
- In New Hampshire, 53% of patients reported being worried about affording the cost of their prescription drugs, according to the NH Consumer Healthcare Experience Survey.
- Spending on retail prescription drugs made up 19% of total healthcare expenditures in commercial insurance (excluding Medicaid or Medicare) in 2022 and spending increased by 9% from 2021 to 2022 (while decreasing in Medicare over the same period of time).
- PBMs and drug manufacturers use rebates to manipulate prices and formularies, but the rebates don’t help relieve the costs to patients at the pharmacy counter.
Addressing these challenges is difficult and the lack of a bipartisan effort at the federal level to support innovation and affordability has resulted in the problem shifting to the states. Maintaining the NH PDAB and its transparent reporting would help Granite Staters and policy makers address the ongoing burden of rising prescription drug costs.
- Lucy Hodder
