The cost of birth control sold at student health centers on college campuses nationwide are skyrocketing and women can thank Medicaid for costs that have now doubled from around $10 a pack to $22 for a month’s worth of pills. The price hike comes after of a change in a Medicaid rebate law that means pharmaceutical companies are no longer providing large discounts on some drugs to universities, including, surprise, contraceptives.
Previously, pharmaceutical companies often sold drugs at deep discounts to colleges, the discounts made business sense for the companies in that they created brand loyalty for the company, plus they didn’t count against the drug makers in a formula calculating rebates they owed states to participate in Medicaid.
But the 2005 Medicaid bill, which went into effect in January, means that drug manufacturers who provide any discounts to colleges mean drug manufacturers need to pay more to participate in Medicaid. The result, fewer companies are offering discounts, meaning the pills are less affordable.
About 40% of female undergrads use oral contraceptives, according to a recent survey conducted by the American College Health Association. Many colleges tried to maintain costs for contraceptives for a few months by buying in bulk before the new law took effect, but now their stocks are low and they have had to increase prices.
ACHA said that the Medicaid bill should have included an exemption for companies to provide prescription drugs to college health centers and the group has supported a proposal to change the law. And for those who are anti-contraceptives, know that this rule change affects all discounts. For example, for the 16% of college students who have been diagnosed with depression—a 56% increase since 2000— their prescription costs are up as well.