Pharmaceutical Spending Rose 18.8% in 2000
Spending on prescription drugs "shot up" 18.8% last year, rising to $131.9 billion, with two dozen treatments accounting for half the increase, a new
National Institute for Health Care Management study has found. According to the New York Times, "more expensive" drugs, as well as increased use of "higher-cost" medicines, fueled the rise in prescription drug spending. The report attributed the $20.8 billion increase in spending "in large measure" to "the rising volume of prescriptions for the top-selling drugs," adding that "more aggressive" marketing by drug companies contributed to the growth. Nancy Chockley, president of the foundation, said, "The recent rise in pharmaceutical spending is due, in large measure, to the growth in sales of a relatively small number of medicines. Most of these drugs are the blockbusters many Americans have come to know by name and see advertised more and more." In the report, researchers attributed 42% of the spending increase to a rise in the number of prescriptions "written by doctors and filled by pharmacies," 36% to a "shift" toward the use of more expensive drugs and 22% to price increases. Prescription drug spending has risen 40% between 1998 and 2000, the study found. In 2000, the 50 top-selling medicines, which cost "almost twice as much" as other drugs -- $67.15 on average, compared to $36 -- accounted for 30% of prescriptions, the report revealed. Retail pharmacies filled 2.9 billion prescriptions last year, an increase of 7.5%, but the 50 best-selling drugs posted a "much sharper" increase, up 18.6% to 866.6 million, the report found. "Simply put, Americans are demanding, and physicians are prescribing, a higher volume of medicines," the study added. The study, based on data from Scott-Levin Inc., did not include mail-order prescription drug sales, though it reported that such sales totaled $16 billion last year, up 26% from 1999 (Pear, New York Times, 5/8). To view the report, go to
http://www.nihcm.org/spending2001.pdf. Note: You must have Adobe Acrobat Reader to view the report.