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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

1 hour ago - Technology

TikTok drives new nostalgia economy

Illustration: Shoshana Gordon/Axios

Older brands, trends and technologies are making a comeback as younger consumers desperately chase slower, less chaotic times.

The big picture: TikTok's algorithm makes it easy for flashback items to resurface and quickly go viral both on its platform and eventually on other social networks.

Updated 5 hours ago - World

Reports: Up to 17 U.S. missionaries kidnapped in Haiti

Haitian soldiers guard the public prosecutor's office in Port-au-Prince earlier this month. Photo: Richard Pierrin/AFP via Getty Images

Children were among up to 17 American Christian missionaries and their relatives kidnapped by a gang in Haiti on Saturday, the New York Times first reported.

Details: The missionaries had just left an orphanage and were traveling by bus to the airport to "drop off some members" and were due to travel to another destination when the gang struck in Port-au-Prince, Haitian security officials said, per the NYT.

6 hours ago - World

Melbourne, "world's most locked-down city," to lift stay-at-home orders

Victorian Premier Daniel Andrews during a news conference in Melbourne, Australia, on Sunday. Photo: Quinn Rooney/Getty Images

Melbourne's stay-at-home orders will end five days earlier than planned, officials in Australia's second-biggest city announced Sunday.

Why it matters: The capital of the state of Victoria has had six lockdowns totaling 262 days since March last year. That means Melbourne spent longer under lockdown than "any other city in the world" during the pandemic, Reuters notes.