Rx DRUG COSTS: Spending Rises 17.4% in 1999, Study Finds
Just two days before the House is expected to vote on a Republican-backed Medicare prescription drug plan, a study released yesterday by St. Louis-based Express Scripts reports that spending on prescriptions rose a record 17.4% last year. Elderly patients saw the largest increases, with average prescription prices increasing 18% for women aged 70-79 and 20% for women 80 and older. Men in the same age groups fared a bit better, experiencing 9% and 11% increases, respectively. For all Americans, prescription spending averaged $387.09 per person in 1999, up from $329.83 in 1998. Express Scripts, a pharmacy benefits manager, noted that the introduction of new drugs, such as the arthritis medicines Vioxx and Celebrex, contributed significantly to the rise in spending last year. However, roughly half of the total increase in drug spending was due to higher prescription costs (Pear, New York Times, 6/27). The study, which examined claims data from more than nine million patients, reflected average wholesale prices, which do not include additional discounts by insurers. Therefore, consumers with prescription drug coverage "likely faced less inflation in drug costs, while the uninsured and those whose insurance doesn't cover drugs probably faced more" (Appleby, USA Today, 6/27). Express Scripts projects that spending on prescription drugs will nearly double over the next five years, reaching $758.81 per person in 2004. "Corporations are going to wake up and begin to say, 'We're not going to cover all of this.' Employers will begin to frame this as a question of sustainability and payers won't be able to sustain this in the long run," Stephen Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota, said (Zimmerman, Wall Street Journal, 6/27).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.