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Expand chart
Data: Peterson-Kaiser Health System Tracker; Graphic: Chris Canipe/Axios

The rising cost of prescription drugs is mostly falling to insurance companies and the government, while patients' out-of-pocket spending is holding steady.

Why it matters: This contradicts the narrative that the outrage over rising drug prices has intensified because consumers are shouldering more of those costs.

What pharma says: "The issue is really around, my perspective, that plans are systematically shedding risk as it relates to pharma and pharma costs," Steve Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, told Axios in an interview last month. "With regard to medicine, you’re exposed to a much higher degree of those out-of-pocket costs."

Between the lines: Overall, insurers and employers are shifting more costs onto employees through higher deductibles and copays. And even though they're absorbing the bulk of the increase in drug spending themselves, some consumers are paying significantly more.

  • Out-of-pocket costs for Medicare Part D grew by 13% between 2013 and 2016, according to Avalere. Over the same time period, the number of seniors who reached the "catastrophic" threshold for out-of-pocket spending rose by about 300,000.
  • Overall drug spending for those enrollees grew by 45%, meaning the taxpayers' tab spiked even more.

Why now: The Affordable Care Act insured millions of new people and required insurance to cover prescription drugs, steering some people's costs away from out-of-pocket spending and into insurance premiums.

  • The law's contraception mandate made a big impact. Between 2012 and 2014, birth control alone accounted for 63% of the drop in out-of-pocket spending among people with employer coverage, per the Kaiser Family Foundation.

Yes, but: Experts say there are still plenty of reasons to be angry about drug costs.

  • "At a minimum it says that the [average out-of-pocket] spending on drugs is not the only thing driving anger," said AEI's Ben Ippolito. "It could very well be that we have more people in the high spending category, and that engenders sympathy, etc."
  • "When you go to a hospital you see tons of investment all around you," he continued. "With pharmaceuticals you only ever seen the finished product — a product that costs effectively $0 to make now that we know how to. The R&D and future investment incentives don’t resonate. It’s an easy target."

Go deeper

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McConnell drops filibuster demand, paving way for power-sharing deal

Senate Majority Leader Chuck Schumer (R) and Minority Leader Mitch McConnell attend a joint session of Congress. Photo: Olivier Douliery/AFP via Getty Images

Senate Minority Leader Mitch McConnell has abandoned his demand that Democrats state, in writing, that they would not abandon the legislative filibuster.

Between the lines: McConnell was never going to agree to a 50-50 power sharing deal without putting up a fight over keeping the 60-vote threshold. But the minority leader ultimately caved after it became clear that delaying the organizing resolution was no longer feasible.

3 hours ago - Technology

Scoop: Google won't donate to members of Congress who voted against election results

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Google will not make contributions from its political action committee this cycle to any member of Congress who voted against certifying the results of the presidential election, following the deadly Capitol riot.

Why it matters: Several major businesses paused or pulled political donations following the events of Jan. 6, when pro-Trump rioters, riled up by former President Trump, stormed the Capitol on the day it was to certify the election results.

4 hours ago - Politics & Policy

Minority Mitch still setting Senate agenda

Illustration: Aïda Amer/Axios

Chuck Schumer may be majority leader, yet in many ways, Mitch McConnell is still running the Senate show — and his counterpart is about done with it.

Why it matters: McConnell rolled over Democrats unapologetically, and kept tight control over his fellow Republicans, while in the majority. But he's showing equal skill as minority leader, using political jiujitsu to convert a perceived weakness into strength.