ONLINE HEALTH: Spending Expected to “Soar” by 2004
"Powered by the demand for prescription drugs," consumer spending for online health goods and services is expected to increase from $200 million in 1999 to $9.8 billion in 2004, the AP/Jacksonville Times-Union reports. According to a new study by Internet research firm Jupiter Communications, while online health spending continues to rise, it will "lag" other industries such as online travel. The Jupiter report, which surveyed 1,667 shoppers last fall, showed that nearly half of respondents preferred the "personal attention, low-prices and convenience in returning goods" offered by traditional drug stores. Jupiter analyst Claudine Singer said, "Consumers say it is easier to shop off-line right now." Moreover, the largest health insurers typically contract with drug benefit managers, which restrict members to certain online drug stores, further discouraging use. But the survey found that prescription drug purchases will account for about 45% of online health spending in 2002 -- or around $4.4 billion. Last year, online drug purchases accounted for less than $30 million. Given consumer preferences, the Jupiter survey predicts that companies combining both online sites and off-line shopping venues most likely will thrive in the future (1/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.