The Prescription Drug Dilemma . . . It’s a Problem!

Yesterday I swung into the CVS that is down the street from my office to get a prescription filled. Of course, I had forgotten to call ahead, so I dropped off my script and sat down to wait for a few minutes while it was being filled by the pharmacist. An older gentleman, I guessed in his early eighties, sat down next to me, nodded and smiled. I was plowing through some work e-mails on my phone, when he said, “So what do you do for a living, young man?” I put my phone away and introduced myself, and we got talking. I told him that I own a business in town specializing in financial and wealth management with my wife Jill. We chuckled a bit about working for a living, and he suggested that I should think about becoming a pharmacist due to the significant increase in drug prices that he is experiencing.

Jim seemed like a pretty good guy. He told me that he has been married for 52 years and has three daughters and 8 grandchildren scattered throughout the Northeast. He was an engineer for Ratheon for 35 years before retiring to Falmouth about 10 years ago. Jim said, “You know, I find that my money is not going as far as it used to with these drug prices.”

I agreed with Jim that prescriptions were certainly getting more costly, but it’s probably too late for me to go back to pharmacy school. He said it was definitely too late for him to pursue a new career, but he might take up robbing banks like the “old guy down in (South) Carolina” he read about in the paper a few weeks back.

My name got called. I got up, shook hands with Jim, and wished him a good day. With his warm Irish smile, and a bit of a glitter in his eye, he pointed a “finger pistol” at me suggesting he needed to rob a bank to pay for his prescriptions.

Hmmm . . . driving back to the office I did a lot of thinking.

When I got back to the office, I did a quick Google check about Jim’s story of a bank robber in South Carolina. It turns out my new friend Jim was correct. An 86-year-old man had robbed a Bank of America branch in Greenville, South Carolina earlier in the month. While the online story didn’t really identify the octogenarian bank robber’s motive, new my buddy Jim, jokingly, thought that the rise in prescription drugs might be the motive.

Yes, while Jim and I may have thought it funny, the sad reality is that prescription drug costs have sky-rocketed in the past couple of decades. There has been a tremendous impact on those with chronic illnesses and older folks of our US society, particularly those living in retirement and on fixed incomes.

In fact, Americans spent $334 billion on prescription drugs in 2017, up 41 percent from 10 years ago, according to National Health Expenditure data. The opaque US health system makes it hard to draw drug-by-drug comparisons with prices abroad. But the OECD (Organization for Economic Co-operation and Development) estimates that the US spent about 47 percent more per-capita on prescription drugs than Canada in 2018 and 160 percent more than the UK.

You know, I find it very troubling that almost a quarter of American patients have trouble affording their prescriptions, according to a survey by health research institute the Kaiser Family Foundation.

Patient “caravans” such as Insulin4All’s — the medical equivalent of a booze cruise — are currently allowed to bring back into our Country a three-month supply of insulin for personal use. But the President and a number of other Presidential candidates have proposed legalizing mass importation from Canada, while some are also looking to peg US prices to those in other developed countries. And unfortunately, some people are simply going without much needed medications. In my opinion, and many others agree, this means potentially more serious illnesses, complications, and a generally poorer quality of life. In the worse cases, even premature death.

The AARP has chimed in on this as well. According to a new analysis from AARP, retail prices of prescription drugs commonly used by older Americans have continued to increase faster than inflation. This marks the 12th year in a row that there has been a substantial increase in prices.

AARP’s Public Policy Institute looked at the retail prices of 754 widely used brand name, generic and specialty drugs used by older Americans and found that the cost increased by an average of 4.2% in 2017, twice the rate of general inflation for that same time period. This is lower than the drug price increases observed in previous years, but it’s a tepid improvement. For example, the report found that a drug used regularly with a retail price of $19,816 for 2017 would have cost only $7,263 if the price increase was in line with general inflation from 2006 to 2017.

The Washington “Wizards”, and those seeking office from both major parties decry the rampant price inflation and ever-increasing burden on those affected. So, what is the answer? Suggestions range from price-fixing, giving Medicare the ability to negotiate prices, or taking on the drug companies in court. Whether it is through legislation, regulation, through the courts, or some sort of broad approach using all three, the problem needs to be addressed. I get it that on a national level we can recognize the drug companies’ self-interest, but we can’t let it supersede the public interest.

You know . . . on a personal level, we need to be readily aware of how our personal expenditures change as we age. According to the Georgetown Health Policy Institute, the average American between the ages of 35 and 49 fills six prescriptions a year. By the time we are between the ages of 65 and 79 that figure rises to 20 prescriptions a year.

While it may seem absurd, even funny, to think of robbing a bank in our old age. But my friend Jim brought to the surface for me this serious dilemma that we need to face as a country and an example of why we always need to be planning for the future. Thanks Jim!

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, Mansfield & Southlake, TX. Jeff can be reached at

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