Prescription Drug Spending Growth Rate Expected To Increase, Report Finds

Main Category: Pharmacy / Pharmacist
Also Included In: Public Health
Article Date: 30 Apr 2007 - 11:00 PDT

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Prescription drug costs increased at a slower rate in 2006 than in 2005, but the growth rate is projected to increase in 2008 and 2009 because of fewer generic drug releases and higher spending on specialty drugs, according to Express Scripts' annual drug trend report, the St. Louis Post-Dispatch reports. The report, released on Wednesday at the company's annual Outcomes Conference in St. Louis, examines data from its three million members to estimate national prescription drug costs. Express Scripts found that drug prices rose 8.2% in 2006, compared with 9% in 2005. The report projected that prescription drug spending would increase at higher rates in 2008 and beyond, according to the Post-Dispatch. Express Scripts attributes the future higher growth rates to fewer blockbuster drugs losing patent protection in 2008 and 2009. In 2006, several blockbuster drugs went off patent and lower drug spending resulted from patients switching to generics. In addition, because companies have launched aggressive campaigns to encourage patients to use generic drugs, much of the costs savings already have been realized, according to Tim Simpson, a principal at Mercer Human Resource Consulting. The report also found that certain drugs had higher levels of cost growth in 2006, including medications to treat diabetes, which experienced a 15.5% growth -- the second year of double-digit increases. Express Scripts expects the costs of diabetes medications to continue to grow at double-digit rates for the next four years, according to Julayna Meyer, vice president of trend management for the company. Spending on specialty medications -- high-cost, often injectable drugs -- is experiencing the fastest growth rate. Spending on those drugs is expected to reach $99 million by 2010, nearly double the $54 million spent in 2006. One in four dollars of prescription drug spending will go toward specialty drugs by 2010, Express Scripts predicts. Express Scripts CEO George Paz said employers could use the same cost-control measures on specialty drugs as are used on traditional drugs to limit spending (Feldstein, St. Louis Post-Dispatch, 4/26).

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