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Rising Drug Costs and the Elderly Population

Info: 9450 words (38 pages) Dissertation
Published: 10th Dec 2019

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Tagged: Social PolicyHealth and Social Care


A continuing health concern in America is the cost of medication.  This research intended to understand the rising of cost of medication and how it affects the health outcomes of the elderly population.  Specifically looking at how a person’s age relates to the price of medication?  Then examining how medication pricing relates to the health outcomes of the elderly?  The study population focused on elderly patients who generally have lower incomes and use Medicare for their insurance provider.  An elderly person is defined as a person who is aged 65 years or older.

Data collection came from the National Medical Expenditure Survey (NMES), CMS Chronic Conditions Data Warehouse, and the Medicare Current Beneficiary Survey (MCBS).  The findings show that higher prices of medication have can have negative impacts on the health of the elderly.  Lower cost of medication can be achieved if the government and private sectors can work together to ensure that affordable medication comes before increased revenue.

Table of Contents


Table of Contents……………………………………………3


General Problem Statement…………………………………….7

Specific Problem Statement…………………………………….7

Purpose Statement………………………………………….8

Research Questions………………………………………….8


Literature Review……………………………………………8

Overview of Literature Concept 1…………………………………9

Overview of Literature Concept 2………………………………..12

Overview of Literature Concept 3


Research Method and Design Appropriateness…………………………19


Sampling Frame…………………………………………..20

Data Collection……………………………………………20

Data Analysis…………………………………………….21



Use and Application of Findings…………………………………23





Rising Drug Costs and the Elderly Population

Medication costs have caused problems for millions of Americans.  According to data by the Wall Street Journal, food and alcohol prices have risen 2.8%, and clothing and accessories are up 5.7%, pharmaceutical prices have increased 9.8% in the past couple years (Tuttle, Prescription Drug Prices in America Are Rising Like No Other Industry, 2016).  One population in particular struggles more than others with these increasing prices.  The elderly population usually lives off a fixed income and generally takes more prescriptions then other groups.  This paper will research the reasons why the elderly struggle to pay for medication and the burden it puts on their health.  This paper will also identify what solutions can be established to help relieve this burden on the elderly population.


Rising drug costs can be a burden to the elderly population.  The federal government expanded Medicare prescription coverage in 2006 with the implementation of Medicare Part D.  The insurance coverage of Medicare Part D has helped individuals curtail out of pocket expenses for outpatient medication, but there are still areas for improvement.  The rate of medication prices increased at eight times the rate of inflation for prescription drugs analyzed by the Wall Street Journal, with an average price hike of 76% from 2010 to 2014 (Tuttle, 21 Incredibly Disturbing Facts About High Prescription Drug Prices, 2016).  In 2015 16.7% of all U.S. health care spending went to prescription drugs compared to 7% in the 1990s (Tuttle, 21 Incredibly Disturbing Facts About High Prescription Drug Prices, 2016).  One consequence of costly prescriptions is medication adherence.  Adherence to medications is important in ensuring that therapeutic benefits are delivered to patients (Frances, Thirumoorthy, & Kwan, 2015).  A substantial portion of medication nonadherence is driven by out of pocket costs of multiple medications (Soumerai, et al., 2006).  Reducing out of pocket costs may encourage many patients to continue using medications with the greatest benefit (Soumerai, et al., 2006).

In a research project conducted by Jack Kennedy and Elizabeth Geneva Wood they examined national changes in rates of cost-related prescription nonadherence by age groups.   The research showed that at the peak of the Great Recession in 2009, approximately 25.1 million Americans reported that during the previous 12 months, they did not fill a prescription because they could not afford it (Kennedy & Wood, 2016).  In 2013 this number shoot up to 26.5 million adults reporting not filling prescriptions, but this dropped to 22.0 million in 2015 (Kennedy & Wood, 2016).  The population age of 65 or older in 2015 had 2.9 million out 46.5 million who were affected by cost-related nonadherence (Kennedy & Wood, 2016).

AARP did a study starting in the early 2000’s and found that the average annual cost for one brand name drug used to treat chronic health conditions topped $5,800 in 2015 compared with less than $1,800 when they started the study (Sagon, 2016).  The recent presidential election highlighted and used prescription price increases as a heavy debate topic when Martin Shkreli increased the price of Daraprim from $13.50 to $750 a pill.  Drug price increases affect taxpayer-funded health care programs like Medicare and Medicaid (Soumerai, et al., 2006).  That affects the elderly population that depends heavily on those programs.  AARP stated that a report put out by Centers for Medicare and Medicaid Services (CMS) looked at the 20 highest price increases from 2014 to 2015 and spending by CMS on those drugs jumped from $146 million to $486 million (Soumerai, et al., 2006).

Many seniors live on a fixed income and prescription cost can create a barrier for them.  They have to choose between paying bills, eating, or refiling their medication.  This leads to nonadherence and additional health problems and cost.  According to the Kaiser Family Foundation, people enrolled in Medicare in 2010 spent on average around $300 per year on prescription drugs, that’s on top of the roughly $4,400 per year they pay for health insurance premiums and other services (Radcliffe, The Price of Prescriptions Overwhelms Fixed-Income Seniors, 2016).  According to Radcliffe even people enrolled in Medicare Part D that take medication to treat hepatitis C, multiple sclerosis, rheumatoid arthritis, or cancer pay between $4,00 and $12,000 out of pocket annually for one drug alone (Radcliffe, The Price of Prescriptions Overwhelms Fixed-Income Seniors, 2016).  According to a study published by Journal of Pharmaceutical Health Services Research found that 2.4 percent of seniors reported skipping a medication in the past 12 months due to the high cost.  When researches looked at the past 24 months, nonadherence increased to 7 percent (Jensen & Xu, 2016).  Even when Medicare Part D is beneficial to seniors they still might come up against using their drug benefits early on and then end up paying for it heavily the rest of the year.  The problems with medication and cost are affecting seniors.  When a person lives off a fixed income and the rates of return and increased wages are stagnate it puts a strain on their underlining budget.  Many seniors are sacrificing their health in order to manage other aspects of their live.  The cost of medication and the nonadherence of taking medication our costing tax payer’s money and putting pressure on fixed income families.

General Problem Statement

The general problem is that medication costs continue to rise.  The rate of medication prices increased at eight times the rate of inflation for 30 prescription drugs analyzed by the Wall Street Journal, with an average price hike of 76% from 2010 to 2014 (Tuttle, 21 Incredibly Disturbing Facts About High Prescription Drug Prices, 2016).  In 2015 16.7% of all U.S. health care spending went to prescription drugs compared to 7% in the 1990s (Tuttle, 21 Incredibly Disturbing Facts About High Prescription Drug Prices, 2016).

Specific Problem Statement

The specific problem is drug prices are increasing and the elderly population cannot pay for their prescriptions which results in nonadherence of medication.  Of adults aged 50 and older 55% of them who decided not to refill a prescription said that the cost of the drug was one of the reasons for skipping it.  Nearly one-third said cost was “the main reason” for not refilling the prescription (Tuttle, 21 Incredibly Disturbing Facts About High Prescription Drug Prices, 2016).  Medication adherence is a critical component in the treatment of chronic diseases; elderly clinicians are faced with unique problems associated with adherence (Frances, Thirumoorthy, & Kwan, 2015).  The different factors affecting medication adherence in the elderly are the patient, medication, health care providers, health care system, and socioeconomic factors (Frances, Thirumoorthy, & Kwan, 2015).

Purpose Statement

The purpose of this research is to understand the rising of cost of medication and how it affects the health outcomes of the elderly population.

Research Questions

The research addressed the following research questions.

RQ1:  How does a person’s age relate to the price of medication?

RQ2:  How does medication pricing relate to health outcomes of the elderly?


The following null and alternative hypotheses served as the foundation for the study:

H10: There is no relationship between medication cost and nonadherence of medication use.

H1A: There is a relationship between higher medication cost and nonadherence of medication use.

H20: There is no correlation between a person’s insurance provider and medication cost.

H2A: There is a correlation between a person’s insurance provider and medication cost.

Literature Review

The literature review is a vital component to understanding research topics.  It helps to give an indication of what has been researched and published.  It is significant to understand our topic and look at conclusions from different points of views.  This specific topic looks at the effect of raising medication cost and the elderly population.  When individuals discontinue taking their medication it can lead to a host of problems, and the elderly are at a higher risk for nonadherence complications.  This literature review was done by using the Kaplan Library and EBSCOhost.  The concepts that this literature review will include:  how does age relate to the price of medication, how does medication pricing effect the health outcomes of the elderly, what measures are being taken to help the elderly afford their medication.

Overview of Literature Concept 1:  How does age relate to the price of medication

Medication cost and its strain on the elderly population is a problem in the American healthcare framework.  The affordability of medication is an important issue for older adults, who spend near a fifth of their income on all healthcare matters (Moran & Simon, 2006).  The inability for people to purchase their medication and adhere to the usage can have a negative effect on the entire healthcare system.  The elderly are a small part of the overall American population, but they account for 34% of total pharmaceutical expenditures (Mueller, Schur, & O’Connell, 1997).  It’s not shocking that the elderly have a high usage of medication expenditures when we get older our bodies wear down and we need assistance with our health.

The elderly use an extensive amount of medication and make up a majority of the expenditure cost.  With aging there are changes in the types of drugs being used, which lead to a higher sensitivity to drugs and susceptibility to adverse drug reactions (Sköldunger, Fastbom, Wimo, Fratiglioni, & Johnell, 2016).  Further the more health problems a person has the more expenditure they incur.  There is a cycle that happens with the elderly.  They either must maintain their medication cycle to stay healthy or purchase more medication to fix or treat a problem that the original medication caused.  Further, most of these medications do help, but they can cause financial strain on the individual and health system that serves them.

Furthermore, as people become retired and no longer work, finances can become an issue.  According to AARP there are 44 million beneficiaries or 15 percent of the U.S. population enrolled in Medicare and they expect that number to increase to 79 million by 2030 (Umans & Lynn, 2009).  That’s a vast number of individuals that will rely on governmental assistance for their healthcare including medication cost.  In 2013 the average yearly cost for common drugs was $11,341 according to Rubin (Rubini, 2016).  It is three-quarters of the average social security benefit of $15,526, or half of Medicare beneficiary’s income of $23,500, and more than a fifth of the average household income of $52,250 (Rubini, 2016).  Government health insurance pays out the lowest amount of reimbursements to hospitals and pharmacies when a patient gets treated.  Hospitals and pharmacies count on those payments to stay in business.

Chronic diseases play an important role in the elderly and medication cost.  Expenditures can be vastly different depending on what kind and how many chronic conditions a person might have.  When it comes to the elderly, the average expenditure for a person with one chronic condition was $196 compared to those with multiple chronic conditions who averaged $519 (Mueller, Schur, & O’Connell, 1997).  The two most frequent and common types of choric conditions are arthritis and hypertension, which is fairly common for the elderly population.  Many critics outside the U.S. believe that consumers are subsidizing the rest of the world because America drug firms charge more than most countries (Danzon, 2000).  Furthermore, many believe that there is a shift of cost to more cash-paying or retail customers including the elderly who already pay excessive prices because of discounts to managed-care organizations and government purchasers (Danzon, 2000).  Our leaders must make an investment on the health of the American population.  A healthier population over time is the correct way to think about medication pricing in this time of rapid medical innovation (Howard, 2017).  Specialty drugs are expected to be the fastest group of drug products and in 2013 those prices compared annually from $53,384 to $2,960 for non-specialty brand name prescription drugs and $283 for generic prescription drugs (Rubini, 2016).

It has been estimated that by the year 2030 the population will be 22% of adults aged 65 years or older (Chen, Plake, Yehle, & Kiersma, 2011).  Which means healthcare providers and professionals will be dealing with the growing frustrations of the elderly population.  These include making multiple visits to providers to address their healthcare needs and the amount of money they will be spending for these services.  It’s important that students and professionals who have worked with older adults have positive attitudes toward them (Chen, Plake, Yehle, & Kiersma, 2011).

The elderly population must also be cautious of drug prescribing by physicians.  The types of medications being prescribed can be expensive and in some cases harmful.  Optimizing drug therapy is an important part of an older person’s health (Rochon, 2017).  When doctors over prescribe or under prescribe medication it can be harmful to the patient.  Prescribing strategies that look at just limiting the overall number of drugs used by older adults in the name of improving quality of care may be seriously misdirected (Rochon, 2017).  Drug doses must be carefully considered when prescribing for older adults (Rochon, 2017).  Roach writes about an approach called stepwise that can help older adults receive the correct dosage and lower cost.  It includes periodic review of current drug therapy; making sure to discontinue unnecessary medication; consider nonpharmacological alternative strategies; consider using safer alternative medications; using the lowest possible effective dose; and including all necessary beneficial medications (Rochon, 2017).  Using this type of approach can lower the cost of medication for the elderly and ensure them that their needs are met.

When viewing all of these factors of medication cost and age we can clearly see there is a strain on older adults and pricing.  There are a lot of factors stacked against the elderly when it comes to cost, conditions, and dosage.  The older people become the higher the cost for them to fight health problems.  When income does not increase, but the cost of medication goes up people start to feel the pinch.  Seniors have the highest amount of expenditures for drugs, but are the most vulnerable when it comes to income and over or under prescribing medication.

Overview of Literature Concept 2:  What are the effects of medication pricing and health

The pricing of medication can have an impact on the overall health of a patient.  Medication adherence in the elderly is a critical component in the treatment of chronic diseases (Frances, Thirumoorthy, & Kwan, 2015).  There are different factors that affect medication adherence which are the patient, medication, health care provider, health care system, and socioeconomic factors (Frances, Thirumoorthy, & Kwan, 2015).  When a patient can no longer afford their medication they either skip the medication all together or take it incorrectly.   The elderly are more likely to have comorbidities, and a higher risk of polypharmacy which presents a higher risk of nonadherence to medications compared to younger populations (Frances, Thirumoorthy, & Kwan, 2015).  Nonadherence is a major factor when it comes to treating hypertension.  Not following health care professional instructions concerning their prescribed blood pressure medicine, is a well-known reason for uncontrolled high blood pressure and a risk factor for adverse cardiovascular disease outcomes coupled with high health care cost (Ritchey, et al., 2016).

In 2007 a study was conducted about seniors and medication nonadherence.  The study found up to 32% of elderly patients take less then prescribed medication in order to avoid cost (Briesacher, Gurwitz, & Soumerai, 2007).  Medication nonadherence can become an extra burden on an entire healthcare system.  When patients do not correctly take their medication their health problems can continue.  This put more of a strain on resources and continues a cycle of treatments that can be financially cumbersome.  It is interesting to note that patients with similar financial backgrounds during this study reacted differently to nonadherence.  Some seniors will decrease adherence after increases in out-of-pocket-cost, others will cut back if the increase is large and some seniors with continue to adhere regardless of the cost increase (Briesacher, Gurwitz, & Soumerai, 2007).  The biggest burden for most of the elderly population is not having prescription coverage.  Without coverage the elderly must budget and find income streams to pay for their medication.  The study also found that seniors that had any type of insurance coverage for medication drastically decreased their risk for nonadherence (Briesacher, Gurwitz, & Soumerai, 2007).  Furthermore, the study was interesting in that it found patients with Medicaid which is not generally seniors actually had higher nonadherence then patients with other insurance providers (Briesacher, Gurwitz, & Soumerai, 2007).  This is important to note because Medicaid generally has a high amount of prescription coverage.  Income is clearly an important factor to nonadherence; the numbers show that patients with a monthly income of $1,000 or less have a 38% chance of not following medication guidelines, were patients that have a monthly income of $4,000 or more have a 17% of nonadherence (Briesacher, Gurwitz, & Soumerai, 2007).

Medication pricing can be detrimental to a person’s health.  A way that seniors can feel more comfortable with the pricing and adherence of medication is by creating a strong relationship with their physician.  Effective and focused physician-patient communication will be required to address cost and quality challenges (Wilson, et al., 2007).  A study done by the New-England Medical Center surveyed 17,000 community dwelling Medicare beneficiaries 65 years and older in all 50 states.  They conducted the survey using a 5-stage mail and telephone protocol, the survey was done in English and Spanish.  In the study they found that forty percent of beneficiaries were nonadherence in some manner (Wilson, et al., 2007).  Out of that group 26.3% included some type of cost-related nonadherence and 28.2% were not related to cost (Wilson, et al., 2007).  Further, nonadherence increased if the patients had more than one chronic condition (Wilson, et al., 2007).  They found that 71% of patients that had 3 or more chronic conditions would take up to 5 or more medications (Wilson, et al., 2007).  The amount of financial strain and daily routine of taking medications can exasperate an individual.

It’s important that the patient and physician speak about medication cost.  However, recent data shows that patients don’t routinely speak to their physician about medication-related symptoms and when they do physicians do not always respond (Wilson, et al., 2007).  It was shown in this study that when patients did have a conversation with their physician about medication that they were then switched to a lower cost medication (Wilson, et al., 2007).  The reason it is important to speak with a physician about pricing is because some physicians maybe more influenced to prescribe a certain medication for various reasons, but that medication maybe more costly.  Of those in this study that reported speaking to a physician about cost 41% were switched to a lower cost medication compared to 12% for those who did not have a discussion (Wilson, et al., 2007).  This study highlighted the importance of an open dialogue between physician and patient.  Patients tend to not speak up or ask questions, because healthcare and medication are confusing and complicated.  Moreover, physicians are quick to hand a medication over without explanation or discussion about cost and adherence.  Quality measurement and quality improvement initiatives that are aimed at prescription-medication-related communication may help improve this area of healthcare (Wilson, et al., 2007).

Medical nonadherence is the quickest way to affect the health of an individual and continue to create financial hardships.  Seniors with one or more chronic diseases will be at a higher risk to skip medication dosages.  Physicians and patients that speak about cost related medication usage will have a higher success rate of treating health problems.  Income is one of the most important factors when it comes to taking medication and not having a medication insurance plan increases the risk of nonadherence.

Overview of Literature Concept 3:  How can the elderly afford their medication

Medicare Part D went into an effect in 2006; this prescription coverage was a solution by the federal government to help alleviate the rising cost of medication for seniors.  It started helping the elderly get the correct medication without putting them into financial hardship.  The drug benefit under Medicare Part D has given millions of low-income elderly Americans the opportunity to receive medication that is vital to their health and longevity (Frank & Newhouse, 2008).  There has been some concern with Medicare Part D and the government’s ability to negotiate a fair price for the drugs people use (Frank & Newhouse, 2008).

Through the years there have been many suggestions on how the U.S. could reduce the cost of medication.  One suggestion has been to establish a model of reference pricing in our health system.  Reference pricing puts interchangeable medicines into divided groups (Salter, 2015).  The prices of these medications are then compared to the prices for the same drugs in international markets then the price is set in comparison with those (Salter, 2015).  Once the reference price is sent if a pharmaceutical company continues to price above that point then the consumer must pay the additional cost beyond that point (Salter, 2015).  This type of law would have to be passed by our government through some type of healthcare reform law (Salter, 2015).  It is important because the reference pricing does not oversight by an international body, but is instead defined by each county (Salter, 2015).  These countries usually base their pricing systems on countries with low medication prices (Salter, 2015).  Our government in the United States spends a large amount of care cost on pharmaceuticals.  The government spends approximately 8%-10% of its total health care cost on medication (Salter, 2015).  This type of reference pricing has helped other countries reduce their cost for medication and improve their quality of care.  The one downside to referencing pricing is research and development and America’s pharmaceutical companies thrive in this area (Salter, 2015).

Due to lack of federal help there have been physicians nationwide trying to keep the cost of medication prices down.  Most Americans would say that medication cost is one of the more pressing issues, and because of that 80 bills nationwide have been proposed to curtail this problem (Boerner, 2017).  Most states are now capping out-of-pocket prescription cost to help their population.  For example in Vermont the cap is $108 a month to $150 a month in Delaware, Louisiana, and Maryland (Boerner, 2017).  In addition to that law some states like Delaware forbid insures from placing all medication for a certain condition in their highest payment tier (Boerner, 2017).  Physicians are actively trying to help their patients by conducting their own research and becoming creative on the types of medications they prescribe.   What some physicians are doing is looking at their patient’s full medical record history and doing a full review of their medication list.  Once that is completed they are working with a pharmacy to find the cheapest and most effective medication checking for drug interactions and pricing.  One other thing physicians can do to help curtail drug prices is to quit taking pharmaceutical company money.  A recent study found that doctors that accept $5,000 or more from drug companies were more likely to prescribe the brand name drug 30 percent of the time (Boerner, 2017).  Physicians should not be tasked with budgeting for every patient that comes through their door.  It is important for them however to communicate and talk about medication pricing with their patients.

Looking at other areas many people believe pharmacy benefit management (PBM) could be part of the solution.  There are three main PBMs that control roughly 78 percent of the market and cover 180 million lives (Burjek, 2017).  However there are 50 PBMs in the nation that manage prescription drug cost (Burjek, 2017).  PBMs are essential in helping companies manage their pharmacy cost.  They ensure medical necessity; manage quality limits to ensure proper dosage and make sure generic medication is taken first (Burjek, 2017).  Transparency is vital to making the best situation work for PBMs if they can make this work for employers who are doing their due diligence then the elderly and government payers need a program like a PBM who will work for them.

Furthermore, the FDA approves the medication that is legally able to be bought and sold in the U.S. market.  Most of these drugs take a while to get to the market.  The FDA is creating a strategy that would approve safe and effective generic medicines more quickly, even if that meant prohibiting brand name companies from trying to game the system (Zuckerman, 2017).  The FDA has to start approving treatments that work, but right now the generic medication they approve is causing more complications.  Just because the FDA approves a new drug it does not mean the prices of medication will go down.  America is one of only two countries were we can directly market drugs to consumers, so that actually increases are spending because the expensive drugs get marketed to consumers (Zuckerman, 2017).  The fact remains that generic drugs will save money per pill but the overall medical costs will climb as the FDA continues to approve treatments that are not proven and inferior to less expensive methods, or if those medications cause complications the companies making the medication continue to charge whatever the market allows them (Zuckerman, 2017).

There are a number of areas where medication cost can be improved.  It will take a host of regulation and collaboration in order to find the solution.  It cannot continue to go in the direction it is currently going.  The elderly and many other low income patients cannot afford to purchase medication and continue to have health issues.  We can take examples of other countries and try to create our own system, but until all the moving pieces reach an agreement, prices will continue to soar.


Medication pricing affects the elderly in many ways and has become a one of the most important topics of conversation in regards to healthcare reform.  In recent years a number of studies and data collections have taken place in order to understand the full spectrum on medication pricing and the elderly population.  Prescription prices can drain the income of the elderly and have serious repercussions on their health.  When individuals fail to renew their medication or skip dosage they can hinder their health in the process.  The failure of doing this causes a person to return to a healthcare center or complicate their health which can lead to longer stays in a hospital.  The elderly are prone to multiple comorbidities and are at a higher risk for polypharmacy, and this can result in a higher risk of nonadherence (Frances, Thirumoorthy, & Kwan, 2015).  The method section details the type of research that has been conducted on a particular topic.  This paper will discuss the method, populations, sample populations, sampling frame, data collection, and data analysis in the research concerning the elderly and medication cost.

Research Method and Design Appropriateness

Using the correct and most accurate research method is vital to conducting appropriate research.  A mixed method of research includes data collection of both quantitative and qualitative data were the data is actually collected concurrently or sequentially (Lund, 2012).  The data is integrated at one or more stages in the process of the research (Lund, 2012).  Qualitative research helps provide insights and understanding to problems through common methods which include interviews, observations, or focus groups.  Quantitative research uses measurable data to try and solve a problem through common methods which include surveys, one on one interview, polls, and other systematic observations.  Quantitative research is especially useful when trying to solve a problem for larger population.  Qualitative methods are more appropriate for hypothesis creation whereas quantitative methods obtain greater depth and result in better objectivity and generalizability (Lund, 2012).

In this study regarding prescription medication cost and the elderly we look at numbers and statistics.  Much of the research is conducted through surveys, polls, and phone interviews.  This topic looks at a larger population which is why a quantitative research method is more conducive to answering the problem of medication cost and the affect it has on people.


We have mentioned the population already in this paper a few times.  Our population is focusing on elderly patients who generally have lower incomes and use Medicare for their insurance provider.  An elderly person is defined as a person who is aged 65 years or older (Frances, Thirumoorthy, & Kwan, 2015).  This population is believed to be constrained the most by rising drug cost and changes to the governments Medicare system.  In 2015 there were 55.3 million people on Medicare and 46.3 million were 65 years or older (Umans & Lynn, 2009).

Sampling Frame

The smaller population you would take out of this group would be 10 older adults aged 65 or older and currently on Medicare.  We are using a quantitative approach which means we will likely use a survey to record income levels and medication usage statistics as well as visits to the hospital and physician’s office.  In this smaller sample it would be helpful to use a qualitative approach as well and ask specific questions regarding a person’s overall life and how their income and health affects the other aspects of their life.

Data Collection

With the type of research and studying that goes on for such a large number of Americas elderly population our research relied heavily on database research and surveys.  Quantitative approaches were used in the data collection of these studies.  One study looking at the drug spending impact of age and chronic disease status used the National Medical Expenditure Survey (NMES) which is a survey administered to a national sample of 36,000 persons in 14,000 households (Mueller, Schur, & O’Connell, 1997).  The survey asked about specific diseases and the use of prescription drug cost as well as income levels (Mueller, Schur, & O’Connell, 1997).

Furthermore, the study of disparities in antihypertensive medication nonadherence among Medicare Part D beneficiaries used the CMS Chronic Conditions Data Warehouse to conduct their quantitative research.  The research was conducted on beneficiaries aged 65 years or older after some exclusion criteria was met they ended up with data for 19.5 million beneficiaries (Ritchey, et al., 2016).  The analysis was filtered by antihypertensive class, state and county of residence, type of prescription plan, and treatment and demographic characteristics (Ritchey, et al., 2016).

One of the more important studies released in 2010 from The Geneva Papers titled Prescription Drug Coverage and Medicare Spending among the U.S. Elderly.  The authors used the Medicare Current Beneficiary Survey (MCBS) to research the spending of Medicare beneficiaries that had Medicare coverage and a Medigap supplemental plan with or without a drug benefit (Shang & Goldman, 2010).  The MCBS is national representation sample of aged, disabled, and institutionalized Medicare beneficiaries (Shang & Goldman, 2010).  The MCBS interviews respondents 12 times over three years.  Each fall, a new group is started in the survey with a sample size of 12,000 respondents, and each summer a group is retired (Shang & Goldman, 2010).  The survey uses self-reported information on health status, health utilization and expenditures, health insurance coverage, and socioeconomic and demographic characteristics of Medicare beneficiaries (Shang & Goldman, 2010).

Data Analysis

The analysis for these research projects consisted of using filtering and calculating tools.  The data is stored through an Excel or SAS file and then the researchers use different programs to run that analysis.  Mainly it is uploaded through a SQL or SAS program were calculations and filters could be incorporated.  Once those calculations are completed the information is put into a table format and shared within the research paper.  Many of the data sets have to be conjured by a common occurrence throughout the sequence of the information.


When researching medication cost and the affects it can have on the elderly we must also look at several other aspects of the information presented.  In this section we will discuss the limitations of the research, the use and application of the findings, and state three recommendations presented from the research.  This section will help us provide answers to the questions asked in the introduction (Forister & Blessing, 2016).  It’s important to understand the limitations in researching the topic of medication pricing and the elderly in order to comprehend the entire magnitude of the information.  Limitations should be recognized so that the value of the study can be considered (Forister & Blessing, 2016).  The use and application will merge together the research and enable an opinion to be formed about the medication cost and the elderly (Forister & Blessing, 2016).  Further, once a use and application has been established recommendations can be made based off the limitations known and the application of the research.


Researching and studying a universal hot topic that involves a wide range of data can create certain limitations.  When looking at prescription drug coverage and the Medicare spending among the U.S. elderly there are several limitations.  First, Medigap plans with drug benefits and plans without benefits have similar non-drug benefits; however those benefits are not the same across the board (Shang & Goldman, 2010).  Secondly, the benefits in one drug plan are better than two other drug plans, but those cannot be distinguished between most Medigap enrollees (Shang & Goldman, 2010).  Lastly, when individuals self-report medication adherence this can be under-reported or over-reported (Shang & Goldman, 2010).

This research also studied the disparities in antihypertensive medication nonadherence.  There were also several limitations for this study.  First, the data system that was used in the study only accessed the availability of medication and not the actual taking of the medication (Ritchey, et al., 2016).  Secondly, nonadherence might be overestimated due to patients who switched medication due to their clinician’s recommendation (Ritchey, et al., 2016).  Thirdly, if a beneficiary was hospitalized the hospital data was not available for that person (Ritchey, et al., 2016).  Lastly, proxy measures might not reflect real results for example the number of physicians that prescribe a medication (Ritchey, et al., 2016).  Finally, all of these studies looked at a wide range of groups and data which has its own limitations.  The data is only as good as those entering it into a system and technology does have its hiccups.

Use and Application of Findings

Medication costs have become inflated over the last decade and have made it difficult for the elderly population with lower incomes to purchase prescriptions.  Older adults can spend near a fifth of their income on all healthcare matters (Moran & Simon, 2006).  They account for over 34% of the total pharmaceutical expenditures (Mueller, Schur, & O’Connell, 1997).  The issue is for mainly lower income seniors were wages don’t increase, but medication cost rise every year.   Most of the people that struggle with this issue are on Medicare which is a government funded program.   This in turn becomes a tax payer issue for the people of America.  The information is clear that this has been a continuing important issue and maybe the most important when it comes to healthcare.  The amount of people that will be on Medicare in 2030 is around 79 million Americans (Umans & Lynn, 2009).  This timeline is short in healthcare terms.  The use and application of these studies can bring to light some the pressures that this problem causes on the elderly.  Since the beginning of The Affordable Care Act a lot of attention has been shined on health insurance and Medicare.  Further, the drug companies of America have garnered negative press in the last election due to an increase in pricing of a drug that helps patients with AIDS.  Many options have been laid out to help combat this problem.

Recommendation:  The U.S. government should pass a law for reference pricing

Reference pricing would put pharmaceutical companies in America on the playing field with other countries.  Medication would be put into several groups and then the prices would be compared to the same prices for that drug in international markets (Salter, 2015).  There is not international oversight, which is helpful to get in passed though the government.  Furthermore, these counties usually base their pricing systems on countries with low medication costs.  Our government spends almost 10% of its healthcare cost on medication.  This model would be unpopular with pharmaceutical companies because they could not set their own pricing and would claim that research dollars would be missed out and they would not be able to create a better product.  More information would have to be looked into with these companies.  The question would be can pharmaceutical companies do more with less.  How innovative can these companies be, by getting rid of wasteful spending and still producing helpful drugs for Americans?     

Recommendation:  Expansion of Medicare

Medicare part D is a prescription drug benefit to help alleviate medication costs for seniors.  The drug plan cost vary depending on the types of medication used and weather you go to a pharmacy in your plan’s network and use drugs on your plan’s formulary.  The monthly plan cost has gone up the past five years and will see its first drop in pricing in 2018 (King, 2017).  The decline comes despite the surging spending in Medicare on specialty drugs a trend that is driving up overall Medicare costs (King, 2017).  With the expansion of Medicare in the healthcare marketplace the government could lower Medicare cost and help spending concerns on medication with Medicare part D.  There are people who believe Medicare for more could be customized for the Obamacare markets by attracting younger individuals (Sanger-Katz, 2016).  By pulling older Americans out of Obamacare the remaining customers would be younger and healthier which would mean lower premiums for everyone and that would also bring in more young customers (Sanger-Katz, 2016).

Recommendation:  FDA needs a quicker approval system

Currently the FDA is approving generic medications that might be causing more harm than good.  They need to be able to approve medication quicker, but with the due diligence of safety.  Companies will try to game the system by submitting a number of generic medications that cause the FDA to fall behind and play catch up which in turn creates oversight.  A generic medication that can be produced with less money and give the person taking it similar affects will help the cost of medication decrease across the board.  Currently the FDA continues to approve treatments that are not proven and inferior to less expensive methods, and those medications can cause complications the companies making the medication continue to charge whatever the market allows them (Zuckerman, 2017).

The government is an important player when it comes to Medicare and medication cost they can help themselves by developing a better approval system through the FDA for generic medication approval and limiting how companies submit new medications.  Further, the FDA could help pass legislation that would prohibit pharmaceutical direct marketing to consumers of the more expensive drugs.  This would lower the demand for those expensive drugs.  The FDA could play a vital part in helping lower cost of medication if they can get buy in from the federal government, pharmaceutical companies, and stakeholders.


Medication prices continue to rise and have become of hot button topic for politicians and the health care community alike.  The various studies and research that has been conducted on this topic shows a need for intervention.  The elderly population in America will continue to rise and Medicare will be the primary insurance holder for many of those individuals.  This could affect the health outcomes of those insured by Medicare.  A government insurance program cannot offer the same type of discounts and medications that private insurance groups can offer.

When elderly adults cannot afford medication they skip dosages or fail to purchase their medication at all.  When this occurs it leads to more health problems and setbacks which cause more expenditure on the healthcare system.  It’s not acceptable or practical to raise medication cost on seniors with mostly fixed incomes that do not adjust to inflation.  Medication pricing can be detrimental to a person’s health.  There are a number of ways to combat the nonadherence and medication pricing, but it takes a group effort from private and public sectors.

The elderly rely on their physicians for care; these physicians can make an effort to take into account the patients medication and income status.  Essentially doing some homework and getting the correct medication at the appropriate price to ensure the best outcomes for their health.  Understandable takes a lot time for physicians and is not always practical.  There are other ways to try and alleviate this pressure that lower income seniors feel.  The government could implement reference pricing.  Medication would be put into several groups and then the prices would be compared to the same prices for that drug in international markets (Salter, 2015).  The medication would then be set at the lowest price point.  Another area to consider is expansion of Medicare and allowing it to be an option in the Obamacare marketplace.  Then lastly restructure the circumstances on how the FDA approves medications entering the free market.  Many of these of solutions require government and private sector partnership and to minimizing the cause and effect.  Two things play a pivotal role in medication pricing and pharmaceutical companies.  Those are revenue and innovation.  Private companies have a duty to their shareholders to make profits and they use the revenue they generate to increase innovation which in turn increase profits.

The current state of medication pricing for lower income seniors is unstainable.  Currently with Medicare Part D a Band-Aid has been put on the situation.  The rate of increases will start to far out pass what insurance is willing to cover.  When this happens patients will be admitted into the hospital more frequently and healthcare cost will continue to balloon.  A system must be created to ensure that medication is provided to lower income seniors and the choice between spending money basic necessities or healthcare is eliminated.


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