Drug Costs in Bitcoin: A New Take on Affordability
As prescription drug prices continue to rise, exploring alternative pricing and payment systems becomes increasingly essential. While most discussions focus on the inflationary nature of fiat currency, examining the historical pricing of drugs in Bitcoin offers a fresh lens. This approach sheds light on how Bitcoin, as a potentially deflationary asset, may provide an unexpected form of cost stability for prescription medications. Below, we delve into the comparative analysis of select brand-name drugs from 2018 to 2024, showcasing how their prices have evolved in fiat currency and Bitcoin.
Key Takeaways with Data
Fiat Prices Are Rising Steadily: From 2018 to 2024, the selected drugs experienced significant price increases in fiat currency. For example, the price of Abilify Maintena rose by 75%, from $1,487 in 2018 to $2,600 in 2024, and Eliquis saw a 42% increase, from $6.70 per tablet in 2018 to $9.50 in 2024.
Bitcoin Pricing Shows a Different Trend: These same drugs became more affordable when priced in Bitcoin. Abilify Maintena decreased by 62% in Bitcoin, from 0.194 BTC in 2018 to 0.074 BTC in 2024. Januvia‘s fiat price rose 33%, but in Bitcoin terms, it fell by 71%, showcasing Bitcoin’s deflationary potential.
Bitcoin’s Appreciation Offsets Fiat Inflation: The overall trend showed that, despite rising fiat prices, the increasing value of Bitcoin over the years provided significant cost savings. The average annual price of Bitcoin increased from approximately $7,657 in 2018 to $35,000 in 2024, which reduced the perceived cost of these drugs in Bitcoin terms.
Deflationary Properties of Bitcoin: The analysis underlines Bitcoin’s strength as a deflationary asset. While Toujeo‘s price rose modestly by 15% in fiat (from $79 in 2018 to $91 in 2024), its price in Bitcoin dropped by 75%, demonstrating how holding Bitcoin could preserve or enhance purchasing power.
Implications for Consumers: These findings suggest that using Bitcoin as a means of long-term financial planning or payment could mitigate the impact of healthcare cost inflation. For example, consumers who held Bitcoin from 2018 and used it for purchases in 2024 would have experienced significantly lower drug costs compared to those using fiat.
Drug Price Benchmarks
To understand the cost of medications, it is essential to grasp the standard drug pricing benchmarks used in the pharmaceutical industry. One such benchmark is the National Average Drug Acquisition Cost (NADAC). NADAC reflects the average price pharmacies pay to acquire medications based on voluntary surveys conducted by the Centers for Medicare and Medicaid Services (CMS). This benchmark accurately represents the pharmacy’s acquisition cost for a drug but does not account for the additional expenses involved in running a pharmacy.
Other notable benchmarks include the Wholesale Acquisition Cost (WAC) and the Average Actual Cost (AAC). The WAC is the manufacturer’s list price to wholesalers or direct purchasers, excluding discounts or rebates. Although it is used widely, it often overestimates the actual cost due to its exclusion of negotiated discounts. Conversely, the AAC represents the actual average cost paid by pharmacies after discounts and is considered more accurate for state reimbursement purposes.
However, this article will focus on NADAC, as it aligns closely with the baseline costs encountered by pharmacies. The WAC and AAC are acknowledged as relevant to industry professionals but are not used here to simplify comparisons and focus on consumer-affecting data.
Limitations of NADAC
While NADAC provides a realistic picture of acquisition costs, it has limitations. The main shortcoming is that NADAC does not include the markup that pharmacies apply to cover labor, overhead, and other operational expenses. This markup can range widely, from as low as 3% to as high as 25% or more, depending on the type of pharmacy and the complexity of its services.
Due to these additional costs, consumers who pay out-of-pocket can often expect to pay more than the NADAC price. The markups account for essential services pharmacies provide, such as professional consultations, dispensing fees, inventory management, and compliance with healthcare regulations.
Historical Price Trends in Fiat Currency
The trajectory of drug prices in fiat currency has consistently increased over the past decades. According to industry reports, the prices of many brand-name drugs have escalated at rates that exceed general inflation. For example, a study by Fierce Healthcare highlighted that medications on the market for over 20 years have experienced a staggering average lifetime price increase of 592%. This price surge is particularly burdensome for consumers paying out-of-pocket, as it compounds existing challenges in healthcare affordability.
Furthermore, newer drugs, such as Eliquis (approved in 2012) and Ozempic (approved in 2017), have also seen their prices rise sharply, outpacing inflation. These trends point to a systemic issue where drug prices increase consistently, leaving consumers facing significant financial challenges.
In summary, while NADAC provides an essential baseline for understanding drug costs, it is crucial to acknowledge the markups associated with pharmacy services and the broader context of rising prices in fiat currency. This backdrop underscores the potential of alternative perspectives, such as pricing in Bitcoin, which may reveal different affordability trends.
Background on Drug Pricing Trends
The pricing of prescription drugs in the U.S. has been on a steep incline, with many brand-name drugs seeing double-digit percentage increases over the years. According to Fierce Healthcare, medications on the market for over 20 years have experienced an average lifetime price increase of 592%. Moreover, just ten drugs account for 22% of Medicare Part D’s total spending, illustrating the concentrated spending on high-cost specific medicines. Notably, newer drugs like Eliquis (approved in 2012) and Ozempic (approved in 2017) have seen price hikes that outpace inflation.
The Role of Bitcoin
Bitcoin is a decentralized digital currency introduced in 2009 that operates without a central authority, leveraging blockchain technology for secure and transparent transactions. With a capped supply of 21 million coins, Bitcoin is often considered a store of value akin to digital gold. While known for significant price volatility—rising from an average of $7,657 in 2018 to around $35,000 in 2024—it has demonstrated strong long-term appreciation.
Deflationary Nature vs. Fiat Inflation
Bitcoin’s deflationary nature contrasts sharply with fiat currency, which is inherently inflationary due to its unlimited supply and central bank policies. While fiat money loses purchasing power over time, causing prices of goods and services to increase, Bitcoin’s fixed supply supports long-term value retention. This deflationary characteristic can protect individuals from the erosion of purchasing power, providing an alternative that holds value as fiat-based economies face rising inflation.
Methodology
Data Collection
To provide an insightful analysis of historical drug pricing in both fiat currency and Bitcoin, it was essential to gather comprehensive data spanning from 2018 to 2024. The primary focus was on brand-name drugs that have shown significant price changes over the years. Historical fiat price data for the selected drugs—Abilify Maintena, Eliquis, Januvia, Enbrel SureClick, Ozempic, and Toujeo—was sourced from publicly available records, pharmacy pricing databases, and CMS reports.
To complement this, corresponding historical Bitcoin prices for each year were obtained from cryptocurrency market archives, ensuring accuracy and consistency. The average annual price of Bitcoin was used to provide a simplified yet representative conversion metric for each specific year analyzed (e.g., approximately $7,657 in 2018, $11,545 in 2020, and $35,000 in 2024).
Conversion Rates
The core of this analysis involved calculating the equivalent drug prices in Bitcoin. This conversion was achieved by dividing the fiat price of each drug by the average annual price of Bitcoin for the same year. The formula for this calculation is:
For example, if the price of Abilify Maintena was $1,487 in 2018 and the average Bitcoin price that year was $7,657, the equivalent price in Bitcoin was approximately:
This methodology was consistently applied to each selected drug across the designated years. By converting these prices into Bitcoin, the analysis aimed to highlight any significant shifts in affordability when viewed through the lens of an appreciating asset like Bitcoin. The outcome provided a comparison between the upward trends of fiat drug prices and their equivalent valuations in Bitcoin, emphasizing the deflationary potential of using Bitcoin as a benchmark for affordability.
The results were then reviewed for both absolute and percentage changes to illustrate how drug prices evolved in fiat and Bitcoin. This approach showed instances where prices in fiat increased but simultaneously decreased when priced in Bitcoin. This approach provided a unique perspective on how Bitcoin’s appreciation over time could offset the increasing cost of essential medications in fiat terms.
Historical Pricing Analysis of Selected Drugs (2018-2024)
1. Abilify Maintena (Monthly Dose)
Description: An extended-release injectable form of aripiprazole used to treat schizophrenia and as maintenance therapy for bipolar I disorder in adults. Specific user numbers are not readily available, but schizophrenia affects approximately 2.8 million adults in the U.S.
Fiat Prices:
2018: $1,487
2019: $1,638
2022: $1,827
2024: $2,600
Percentage Increase: 75% from 2018 to 2024.
Bitcoin Prices:
2018: 0.194 BTC (Bitcoin at ~$7,657)
2019: 0.141 BTC
2022: 0.052 BTC
2024: 0.074 BTC (Bitcoin at ~$35,000)
Percentage Decrease: 62% from 2018 to 2024.
Analysis: While the fiat price surged by 75%, the price in Bitcoin terms dropped significantly, highlighting Bitcoin’s potential as a deflationary asset.
2. Eliquis (Per Tablet)
Description: An anticoagulant is prescribed to reduce the risk of stroke and blood clots in patients with atrial fibrillation, deep vein thrombosis, or pulmonary embolism. As of 2024, about 3.7 million Medicare enrollees were prescribed Eliquis.
Fiat Prices:
2018: $6.70
2019: $7.09
2020: $7.53
2022: $8.40
2023: $8.90
2024: $9.50
Percentage Increase: 42% from 2018 to 2024.
Bitcoin Prices:
2018: 0.000875 BTC
2019: 0.000614 BTC
2020: 0.000652 BTC
2022: 0.000240 BTC
2024: 0.000271 BTC
Percentage Decrease: 69% from 2018 to 2024.
Analysis: Eliquis’ fiat price rose by 42%, but in Bitcoin terms, it became 69% cheaper, reflecting Bitcoin’s strong appreciation during this period.
3. Januvia (Per Tablet)
Description: A medication for type 2 diabetes that helps regulate blood sugar levels. Approximately 869,000 Medicare beneficiaries were prescribed Januvia between May 2022 and June 2023.
Fiat Prices:
2018: $13.75
2019: $14.43
2020: $15.12
2021: $15.90
2022: $16.69
2023: $17.49
2024: $18.33
Percentage Increase: 33% from 2018 to 2024.
Bitcoin Prices:
2018: 0.001796 BTC
2019: 0.001249 BTC
2020: 0.001309 BTC
2024: 0.000524 BTC
Percentage Decrease: 71% from 2018 to 2024.
Analysis: Despite a 33% rise in the fiat price, Januvia’s cost in Bitcoin terms plummeted by 71%.
4. Enbrel SureClick (Per Syringe)
Description: An injectable biologic used to treat autoimmune conditions such as rheumatoid arthritis, psoriatic arthritis, and plaque psoriasis. Around 48,000 Medicare enrollees were prescribed Enbrel in the same period.
Fiat Prices:
2019: $1,259
2020: $1,355
2021: $1,454
2022: $1,559
2023: $1,715
2024: $1,851
Percentage Increase: 47% from 2019 to 2024.
Bitcoin Prices:
2019: 0.109 BTC
2020: 0.117 BTC
2024: 0.053 BTC
Percentage Decrease: 51% from 2019 to 2024.
Analysis: Enbrel’s fiat price jumped by nearly half, yet it halved in Bitcoin terms, demonstrating Bitcoin’s potential for retaining purchasing power.
5. Ozempic (Per Pen)
Description: A once-weekly injectable medication for type 2 diabetes that aids in blood sugar control and weight management. Specific user numbers are not readily available, but it has gained popularity for its efficacy.
Fiat Prices:
2021: $273
2022: $287
2023: $301
2024: $311
Percentage Increase: 14% from 2021 to 2024.
Bitcoin Prices:
2021: 0.036 BTC
2022: 0.0082 BTC
2024: 0.0089 BTC
Percentage Decrease: 75% from 2021 to 2024.
Analysis: Although the fiat price rose by 14%, the cost in Bitcoin fell by 75%, reflecting the cryptocurrency’s growth.
6. Toujeo (Per Pen)
Description: A long-acting insulin used to improve blood sugar control in adults with diabetes mellitus. Exact user numbers are not specified, but insulin therapies are commonly prescribed for diabetes management.
Fiat Prices:
2018: $79
2019: $83
2020: $82
2022: $82
2023: $86
2024: $91
Percentage Increase: 15% from 2018 to 2024.
Bitcoin Prices:
2018: 0.0103 BTC
2019: 0.0072 BTC
2020: 0.0071 BTC
2024: 0.0026 BTC
Percentage Decrease: 75% from 2018 to 2024.
Analysis: Despite a modest fiat increase of 15%, Toujeo’s Bitcoin price dropped by 75%, aligning with Bitcoin’s trend of long-term value growth.
Analysis of Trends and Volatility
Bitcoin Volatility
Bitcoin is known for its substantial price fluctuations, which can significantly impact affordability compared to fiat currency. While the average price of Bitcoin rose from approximately $7,657 in 2018 to $35,000 in 2024, its path was marked by dramatic swings. This volatility can create uncertainty for consumers considering using Bitcoin to pay for healthcare expenses. Despite these fluctuations, when viewed over more extended periods, Bitcoin’s value has appreciated, which can make drug prices, when priced in Bitcoin, appear more stable or even decline relative to their fiat counterparts.
Fiat vs. Bitcoin Cost Stability
The comparison between fiat and Bitcoin pricing of drugs reveals a striking trend: while prices in fiat currency have increased significantly, prices in Bitcoin terms have generally decreased. For example, Eliquis’ fiat price rose by 42% from 2018 to 2024, yet in Bitcoin terms, it became 69% cheaper. This pattern underscores Bitcoin’s deflationary properties and potential role as a hedge against fiat inflation. In Bitcoin terms, such stability highlights its value as an asset that can preserve purchasing power even as the cost of essential items rises in traditional currency.
Insights on Delayed Gratification and Cost Offsetting
Potential Savings with Bitcoin
Holding Bitcoin over time could have provided significant cost-offsetting benefits for consumers facing rising drug prices. As demonstrated, drugs like Januvia, whose fiat price increased by 33%, saw a 71% reduction in cost when measured in Bitcoin. This suggests that individuals who held Bitcoin and used it for healthcare expenses over the years could have paid far less than those using fiat currency alone. Despite its volatility, the delayed gratification of holding Bitcoin may offer a strategic advantage in managing long-term healthcare costs.
Challenges
However, using Bitcoin for real-time transactions presents challenges. Its volatility can create difficulty for consumers who need to make immediate payments. If Bitcoin’s price dips significantly at the time of purchase, affordability could temporarily worsen compared to fiat currency. This unpredictability necessitates balancing leveraging Bitcoin’s long-term benefits and managing short-term risks.
Case Study
Detailed Example: Abilify Maintena
Abilify Maintena, an injectable treatment for schizophrenia and bipolar I disorder, exemplifies these trends. In 2018, its price was $1,487, which increased to $2,600 by 2024—a 75% rise in fiat terms. However, the price dropped in Bitcoin from 0.194 BTC in 2018 to 0.074 BTC in 2024, reflecting a 62% decrease. This case demonstrates how, despite fiat price hikes, the cost of drugs measured in Bitcoin may decrease due to its appreciating value. For patients holding Bitcoin, this could translate into significant savings over time.
Takeaways
Observations on Affordability
Analyzing drug prices in both fiat and Bitcoin highlights two distinct stories of affordability. While fiat currency prices continue to rise, the same drugs priced in Bitcoin often show a downward trend. This dichotomy emphasizes Bitcoin’s potential to hedge against inflation and maintain purchasing power in the face of increasing healthcare costs.
Implications for Consumers
Consumers who consider Bitcoin part of their financial strategy could potentially offset the impact of rising drug prices. While holding Bitcoin presents risks due to price volatility, its long-term appreciation offers an intriguing solution for managing future healthcare expenses. This approach could empower individuals to better prepare for and navigate out-of-pocket healthcare costs.
Conclusion
Final Thoughts
The comparison of drug prices in fiat and Bitcoin underscores Bitcoin’s potential as a tool for mitigating the effects of inflation. While fiat-based drug prices have risen sharply over the past few years, prices in Bitcoin terms have often fallen, highlighting Bitcoin’s deflationary nature and potential as a financial hedge in healthcare.
Future Considerations
As the healthcare industry continues to explore new ways to handle rising costs, further analysis and consideration of Bitcoin and other deflationary assets could prove valuable. Encouraging broader adoption and understanding of Bitcoin as part of healthcare payment systems could open pathways for improved cost management and consumer financial resilience.
