When Inflation Impacts Drug Costs: The Westminster Pharmaceuticals Approach
Inflation is impacting every corner of American life, and no industry is impervious to it – including the pharmaceutical industry. As a result, pharmaceutical companies are facing pressure from consumers and regulators alike to drive down drug pricing to ensure medications are available and accessible to those who need it.
With our consumers as our top priority, Westminster Pharmaceuticals is taking steps to help assure affordable drug pricing and combat the forces driving prices. By ramping up the production of low-cost generics, absorbing profit margin loss, and offering our partners the most competitive rates possible, we hope to pass on savings to consumers so everyone can afford the drugs they need.
Generic Drug Savings
Generic drugs are the most affordable option on the market today, typically costing 80-85% less than their brand-name versions. Generics make up 90% of U.S. prescriptions and 30% of all U.S healthcare spending. They are estimated to save the U.S. healthcare system $330 billion each year.
Westminster Pharmaceuticals focuses our work on these invaluable generic drugs because, while they cost significantly less than branded drugs, they are proven to be just as effective and safe to use. They expand access to life-saving medications that consumers may not otherwise be able to afford.
Our Tactics to Keep More Money In Your Pocket
With awareness of the current rising prices consumers are facing at their pharmacy counters, Westminster Pharmaceuticals has employed several tactics to keep our prices low and pass on those savings to consumers.
By nature, competition keeps prices down in any industry. Pharmaceutical drugs are no different. Brand-name drugs without competition are costly, and their costs usually increase either annually or biannually. As pharma companies inch closer to the end of their patents and exclusive rights granted by the FDA to manufacture a given drug, costs can skyrocket.
As soon as drug formulations are no longer exclusive to their original developers and generics can enter the market, the natural competition helps to regulate costs for that drug across the market. By continuously launching new generics and maintaining supply levels of competitive generics, we’re helping to keep costs low.
Ensuring the availability of critical drugs is also important to manage rising costs. Supply chain shortages and a rise in demand have made this more difficult in recent years, but at WPRX, we strive to help our partners maintain inventory levels to avoid shortages and keep market prices steady. As demand and product rates have increased, Westminster’s decision to absorb some of the profit margin loss helps minimize what gets passed on to the consumer.
We also offer the most competitive rates possible to our partners. While we can’t control the rates retailers charge, by keeping our prices low, the hope is that they will pass on these savings to consumers.
The Ongoing Challenge of Maintaining Affordable Drugs
The challenge of maintaining affordable drug prices goes beyond manufacturers and pharmacies - much of the responsibility is on pharmacy benefits managers (PBMs) and insurers. According to a whitepaper by the USC Schaeffer Center for Health Policy and Economics, consumers are not benefitting fully from the lower prices created by generic drug entry because PBMs and insurers are reaping the financial benefits without passing the savings on to those they are meant for – consumers. A 2021 study found that the decline in generic drug prices between 2007-20016 was not fully passed to consumers, and we can only assume that the trend has continued without proper regulation of these pharmaceutical industry players.
PBMs and their affiliated parent companies use this lack of transparency to increase their own profits, which ultimately increases the bill footed by consumers. Under the clever guise of inflation, many might understandably assume that entirely external, uncontrollable, factors are to blame when in reality, PBMs are directly driving prices higher. They have the opportunity to make drugs more affordable for consumers – they’re just not seizing it.
The responsibility is not PBMs entirely, but they will be pivotal in keeping drug costs low for the long term. Still, Westminster Pharmaceuticals believes that it’s our duty to positively influence drug prices in ways we can control, and we will continue to keep our rates as competitive as possible, ensure inventory to avoid shortages that can hike up prices, and absorb the margin loss that we can so that we don’t pass on too much to the consumer.
View our product catalog to see the many generic prescriptions, over-the-counter medications, and dietary supplements we provide, and get in touch to become a partner and give your customers access to affordable medications from a reliable partner.