The staggering cost of prescription drugs in Georgia

Stock image of prescription pills

Stock image of prescription pills. (Credit: iStock)

Key Points
  • · Medicare prescription-drugs costs have skyrocketed 89% in Georgia from 2013 to 2019.
  • · Prices for common medications in Georgia have also ballooned during that time.
  • · Cost transparency is lacking even from state government as key prescription-drug players blame each other.

For Nicola Jackson, how to stretch her family’s tight budget often boils down to choosing between paying for the prescription drugs she needs to stave off head-splitting migraines or buying groceries. Medicare doesn’t cover all the costs for her medications to treat fibromyalgia, rheumatoid arthritis and nerve damage, leaving Jackson to scrape for dollars each month in her constant battle to afford prescription drugs.

“I know I still have a bill, but what am I going to do?” Jackson, a Cherokee County resident, said in a recent interview. “If it wasn’t for my faith, I tell you, sometimes it gets real tough.”

Jackson isn’t alone in her struggle to pay for prescription drugs in Georgia. Many residents are left to scratch and claw to cover out-of-pocket drug costs, all while having no clue as to why medication costs are on the rise. Georgia is among the highest-spending states in the U.S. when it comes to prescription drugs and out-of-pocket costs, according to national researchers:

  • Georgia ranked 8th on overall medication spending in 2019 with nearly $14 billion in pharmacy retail sales, or roughly $1,300 per capita, an analysis by the nonprofit Kaiser Family Foundation shows.
  • The state also ranked 4th in out-of-pocket drug spending at around $195 per person annually in 2018, the medication-assistance group NiceRx found.
  • Gross costs for drugs under Medicare in Georgia soared from nearly $3 billion in 2013 to more than $5.6 billion in 2019, totaling more than the state’s share of current costs for Medicaid, according to State Affairs’ analysis of federal Centers for Medicare and Medicaid Services data.
Prescription drugs infographic
Costs for prescription drugs under Medicare in Georgia increased between 2013 and 2019.
(Credit: Brittney Phan for State Affairs)

While the numbers paint a clear picture of rising medication costs, the root causes for why drug prices have soared in recent years remain largely unknown, shielded behind certain carve-outs in state law and a complex system of behind-the-scenes price negotiations that many patient advocates blame for the rising costs. Even the full picture of how much Georgia spends on prescription drugs each year is incomplete, with one state agency failing to provide State Affairs with data on drug costs under Georgia’s Medicaid programs before this story was published.

Many key players in the medication distribution chain have pointed the finger at each other as the main driver behind rising costs, leading some advocates to declare that the whole system is rigged.

“Everybody’s hands are dirty,” said Barbara Adle, a retired nurse from DeKalb County who volunteers for a local senior-living advocacy group. “And the person who needs the drugs is the last person whose voice is heard.”

A window into drug costs

Seeing her monthly bills for prescription drugs on paper is bad enough for Jackson. Having to tell her husband about it makes the stress even worse. Each week, the couple parses out how much money they have for groceries, water, utilities and gas for the car – and how much they’ll need to cover the battery of prescription drugs Jackson takes to get through her days without too much pain.

Skipping her medications isn’t an option, Jackson said. Without them, she could find herself struck with a bout of crippling migraines and joint pain, such as what happened last year when she had to push back a Botox injection she needs every few months for migraines because she couldn’t afford the $300 copay. More often than they’d like, the Jacksons must either sacrifice groceries or load up their credit cards with out-of-pocket drug charges, which last year ran them about $4,000 they struggled to pay.

It’s a constant source of guilt and frustration for Jackson, who will have another potentially big bill to pay with her husband once her daughter heads off to college next year.

“It’s sad because I hate to have to tell my husband, ‘My medicine is this or my medicine is that,'” said Jackson, fighting back tears in a recent interview. “I feel bad because now I’m taking from something else that needs to be taken care of.”

Nicola Jackson
Nicola Jackson is one of many Georgia residents who struggle to pay for prescription drugs. (Credit: Nicola Jackson)

In recent years, Georgia residents and their insurers have spent more on prescription drugs and out-of-pocket medication costs not covered by health plans than most states in the U.S., according to several studies. While researchers have tracked the general increase in drug costs over the past decade, it’s unclear exactly how much Georgia’s prescription-drug costs and prices have risen.

A 2020 Journal of the American Medical Association study tracked a near doubling of prices for brand-name drugs from 2007 to 2018 but does not single out prices in Georgia. Those prices have even outpaced the rise in inflation, the study found. Some sources give a glimpse into Georgia’s increasing medication costs, such as data for prescription-drug claims paid under the federal Medicare program, which covers people aged 65 and older.

Georgia joined every other state in the country in witnessing a trend of more people filling prescriptions under Medicare and steep cost increases for those drugs between 2013 and 2019, rounding out to an 89% hike in Georgia’s drug costs during that time, according to federal data. On top of gross costs statewide, the average drug costs per person under Medicare in Georgia spiked from $3,133 to $4,459 annually per person – outpacing 40 other states, including most states in the South. The number of people who filled prescriptions also rose from roughly 947,000 to more than 1.2 million.

Meanwhile, private health insurers are not required to disclose data on prescription-drug claims publicly. Even the state agency tasked with overseeing low-income Medicaid programs in Georgia and the health plan for state employees have been slow to hand over prescription-drug data. As of this story’s publishing, the state Department of Community Health had not handed over drug claims data State Affairs sought in an open-records request made July 23. The agency also has not estimated when that data will be available, which Georgia’s open-records law requires.

UPDATE: The Department of Community Health provided the requested data to State Affairs on Aug. 26, the day after this story was published. The data shows Georgia’s Medicaid programs saw prescription-drug payments climb from nearly $1.2 billion in mid-2015 to more than $1.4 billion through June of 2021. Costs for drugs under the state health benefit plan – including active and retired state government workers – also rose from about $907 million to nearly $1.5 billion during that same time.

Figuring out the full scope of Georgia’s medication costs and prescription-drug prices has long dogged local advocates like Dorothy Leone-Glasser, the executive director of the group Advocates for Responsible Care. Few details on the math behind prescription drugs’ prices and what fees, discounts and other payments factor into their final costs ever come into full public view, mostly due to lax regulations and the tendency of many companies to rely on trade secrets, Leone-Glasser says.

“A lot of this is shrouded in a lot of secrecy,” Leone-Glasser said in a recent interview. “We know that the players and who’s making so much money don’t want to peel back the layers. What we’re asking for is transparency.”

Choosing drugs over groceries

While Medicare data hint at rising medication costs across the board in Georgia, research by NiceRx shows prices for many high-demand prescription drugs have also ballooned – including for several drugs that Jackson needs. Jackson said she takes the brand-name drugs Lyrica and Trulicity to help keep her migraines and Type 2 diabetes in check. NiceRx’s findings show average prices for both drugs shot up between 2012 and 2017:

  • 137% increase for Lyrica: from $174 per fill to $411
  • 35% increase for Trulicity: from $497 per fill to $674

Other common prescription drugs in Georgia have also rocketed up in price. The American Association of Retired Persons (AARP) Georgia chapter estimates the cancer drug Revlimid shot up from an average of roughly $185,500 per year in 2015 to nearly $270,000 in 2020. A 2020 congressional report traced Revlimid’s steep price hikes to a desire by executives for its manufacturer, the New Jersey-based drugmaker Celgene, to “meet company revenue targets and shareholder earnings goals.”

Similar price spikes have been seen for common drugs that treat diabetes, asthma and chronic obstructive pulmonary disease, according to the AARP’s findings. Medicare and other health plans cover most prescription drug costs to keep them affordable. However, many low-income Georgia residents and seniors on fixed incomes still struggle to make up the difference for what’s not covered, said Nancy Pitra, AARP’s Georgia associate state advocacy director.

“They’re having to pick and choose between paying for medications and buying groceries,” Pitra said in a recent interview. “That’s not living at all.”

Prescription drugs infographic
Costs for prescription drugs under Medicare throughout the U.S. increased between 2013 and 2019.
(Credit: Brittney Phan for State Affairs)

Sometimes, even local Medicare providers decline to cover certain drugs that doctors insist their patients need. Decatur resident Alex Roetger has butted heads with his Medicare provider over an inhaler made in Germany called Spiolito Respimat that his doctor prescribed for respiratory issues but which he said comes with a price tag of $500 every other week.

The inhaler has worked wonders in the year or so since Roetger began losing his voice, and it doesn’t contain steroids that “tear my lungs apart,” he said. But while his Medicare provider covers costs for some inhalers, Roetger said it won’t pick up the bill for the one his doctor prescribed.

On top of other medications he takes for high blood pressure, Roetger said he can’t afford to add a $12,000 annual tab for the inhaler to his budget in retirement. He’s now waiting to see if any outside groups will help whittle down the costs. Until then, Roetger expects he’ll need to ration the free inhaler samples that his doctor gave until they all run out.

“What I’ll do is what every other senior does: I’ll cut the dosage in half,” Roetger said in a recent interview. “Then a third, then a quarter. Then you just give up.”

Roetger is among many seniors and low-income Georgia residents who rely on outside help from groups like GoodRx to subsidize their drug costs. Some drug companies also offer grants to cover costs, such as for the brand-name drug Enbrel that Jackson takes for rheumatoid arthritis. The need for many Georgia seniors to lean on outside funding to pay for medications when they already have health insurance frustrates local advocates like Ellen Miller-Mapp, a member of the senior advocacy group LeadingAge Georgia.

“It’s falling to the end consumer to go through complicated choices to get relief,” Miller-Mapp said in a recent interview. “As a country, we just have not done well by our seniors. There’s just no other way to put it.”

Doctors in Georgia have also seen cash-strapped patients delay filling their prescriptions or ration what drugs they have to make ends meet. State and federal lawmakers need to double-up efforts on passing regulations to clear away transparency hurdles that hurt patients, said Tom Kornegay, a spokesman for the Medical Association of Georgia.

“Patients delay, forgo or ration their medication when treatments are cost prohibitive – which undermines their health,” Kornegay said in a recent statement. “(We believe) that the best way to reduce health care costs is to reduce the massive administrative burdens that don’t have anything to do with patient care, including billing.”

Blame game

The inability of many people in Georgia to pay for prescription drugs also hits local independent pharmacists like Chelley Williams, who opened a pharmacy in Douglas County in 2015.

A constant source of trouble was penalties Williams faced when patients skipped picking up prescriptions because they could not afford them, she said. Each time that happened, she lost out on a chunk of the reimbursements that pharmacies receive to fill prescriptions, she said. The practice caused Williams’ pharmacy to hemorrhage money, forcing her to shut down in 2019.

“It was kind of a vicious cycle,” Williams said in a recent interview. “In the end, the patient loses. They’re paying more.”

This graph by the medication-assistance group NiceRx shows the annual average out-of-pocket medication spending per person for all states in 2018. (Credit: NiceRx)

Williams traced much of her pharmacy’s financial issues to companies called pharmacy benefit managers that act as intermediaries between health plans and drugmakers to negotiate medication costs. Critics argue most pharmacy benefit managers worsen drug prices rather than help lower them. They point to a complicated system of drug discounts and how medications are ranked on certain lists that pharmacy benefit managers influence as the root of recent rising prices.

Rebates that go to pharmacy benefit managers to help lower the overall costs of prescription drugs often never made it to patients’ pockets, offering little relief for Georgia patients when medication costs crop up that their plans don’t cover, said Greg Reybold, the general counsel with the Georgia Pharmacy Association.

“When (pharmacy benefit managers) are acting at their worst, they’re able to exploit drug markets at a massive scale,” Reybold said in a recent interview. “They’ve monetized every side of it.”

For their part, many pharmacy benefit managers point the finger right back at drugmakers who they claim set the initial cost for medications too high and push more expensive brand-name drugs when cheaper alternatives exist. Many pharmacy benefit managers also accuse independent pharmacies of being profit-driven when pushing for recent regulations in Georgia that they claim limit their ability to negotiate drug prices and secure discounts from drugmakers to drive down the final cost of medications.

“Any assertion that (pharmacy benefit managers) are raising drug costs is completely false,” said Greg Lopes, a senior vice president with Pharmaceutical Care Management Association. “(Pharmacy benefit managers) are the one member of the (prescription-drug) supply and payment chain working to reduce costs.”

Lawmakers push for transparency

Amid the fingerpointing, state lawmakers in Georgia have largely homed in on regulating pharmacy benefit managers’ practices and boosting cost transparency through several bills over the last few years. Since 2019, several state bills have been signed into law to block pharmacy benefit managers from directing patients to certain pharmacies over others and give health plans access to a larger share of drug discounts, called rebates.

State lawmakers also passed recent legislation to disclose what rebates pharmacy benefit managers have collected and to create a new database to track payments for many health services, including prescription drugs filled under private health plans. That process is in the early stages of being set up through the newly created state Office of Health Strategy and Coordination, said a spokesman with Gov. Brian Kemp’s office.

Without more data on medication prices and costs in Georgia, some state lawmakers say it’s tough to craft legislation that can tackle costs for specific drugs that many Georgia residents need – even though they believe the recent bills have made strides in cost transparency.

State Rep. David Knight
State Rep. David Knight, R-Griffin, has sponsored several bills focused on prescription drugs and transparency in the Georgia General Assembly since 2019. (Credit: Georgia House of Representatives)

“This whole game is like whack-a-mole,” said state Rep. David Knight, a Republican from Spalding County who has sponsored several medication-focused bills. “You think you’ve solved one problem and something else pops up.”

Legislation isn’t the only tool that state officials have tapped recently to start pulling back the curtain on how much drugs cost in Georgia. Over the past two years, a law firm from Mississippi has been digging into prescription drug data for Georgia’s Medicaid programs and the health plan for state employees, according to a document State Affairs obtained in an open-records request.

Representatives from the firm, Liston & Deas LLC, declined to give details on what they’re investigating in Georgia – though the firm has been conducting probes in several other states into the practices of a company that also manages one of Georgia’s Medicaid programs.

Just this year, the firm secured a $55.5 million settlement in Mississippi and an $88.3 million settlement in Ohio from that company, Centene Corporation, to cover large Medicaid costs in those states. One of the firms’ attorneys did tell State Affairs that they are pursuing similar litigation in Oklahoma, Kansas, Arkansas and Texas. State records show several pharmacy benefit managers have reimbursed local pharmacies less on average than they charge Georgia’s Medicaid programs for prescription drugs – a difference of roughly $89 million from July 2017 to July 2019.

Georgia Attorney General Chris Carr also last month joined several state attorneys general to back North Dakota health officials in a lawsuit brought by the pharmacy benefit managers’ association, which seeks to overturn that state’s regulations on many of their practices. The outcome of that lawsuit could set the tone for possible legal challenges to Georgia’s recently enacted rules on pharmacy benefit managers going forward.

Ultimately, patient advocates stress it’s the millions of Georgia residents reliant on prescription drugs who suffer no matter which party deserves the most blame between pharmacy benefits managers, drugmakers, local pharmacies and a host of other players. For seniors like Roetger, a future in which their medications become affordable can seem like wishful thinking. Still, Roetger holds out hope he’ll one day have easier access to his inhaler – though, for now, it’s a slim hope. 

“Who knows? Maybe in 10 years, things will be different,” Roetger said. “But in 10 years, I may be gone.”

What else would you like to know about prescription drugs in Georgia and the state’s health care system? Share your thoughts/tips by emailing [email protected].

Header image credit: iStock