A Publication of WTVP

What is causing the cost of drugs to increase sharply? Is it related to pharmaceutical companies raising their prices? Should I worry about drug prices when all I have to pay is my $10 co-payment? These are important questions that we need to understand.

Drug expenditures are expected to triple in the next decade. They have been increasing 15 to 20 percent over the past few years and are expected to continue at double digit rates. There are several contributing factors, but utilization continues to be the primary reason behind the growth. Utilization is responsible for nearly half of the increase in the rising costs. The predominant reason being more users of drug therapies and increases in the number of days of therapy. Basically, we are living longer; and taking more medications for longer periods of time.

Pharmaceutical price inflation does play a part in the escalation of drug expenditures, representing 22 percent of the overall increase. Drug prices have grown 4 to 6 percent over the past few years and will likely continue at this rate for the next three years. Pharmaceutical companies are also seeing better results through advertising, which is having a larger impact on utilization. Pharmaceutical companies have always focused their marketing efforts toward physicians, but they have recently changed their marketing strategy towards the consumer. It is obvious they are having good results.

A recent FDA study found when a patient asked a physician for a specific prescription product, 82 percent of such visits ended with a prescription, 60 percent for the requested brand.

Another strategy influencing drug costs is the delay in generic competition. Generic drugs usually cost one-third to one-half the average cost of a brand name drug and are one of the most efficient means of reducing drug expenditures.

Tactics of delay are last-minute pediatric indications, new dosage forms, patent litigation, and questions of safety or equivalency of generics. One particular company has delayed their generic competition with a lawsuit claiming a new patent on the raw material. In the meantime, the same company is heavily marketing to switch patients from their original drug to a similar and recently FDA approved compound, circumventing generic competition.

Third party drug coverage has dulled the senses of many patients/members by removing the concern for drug costs. Last year, drugs represented the largest factor contributing to mounting health care costs. Many employers have been unable to absorb the soaring costs of drugs and have increased insurance premiums. The answer is "yes," we must be more concerned with the cost of our medications, and our medication is costing us more than $10. We need to become better educated as consumers and understand what our drug regimen truly costs. We need to change lifestyle and behavior prior to taking a drug. We need to encourage our physician to prescribe a generic first. Furthermore, we need to be cognizant of preferred brands that will lower costs paid by our employer.

Over the past 20 years we have seen an explosion of new drugs. Many of these drugs were for previously untreatable conditions.

Twenty years ago AIDS was a death sentence, but with the new anti-viral regimens the virus can be arrested to undetectable levels. Cancer therapies have improved with stronger anti-nauseants and colony stimulating factors that help the bone marrow recover to fight infection.

We’ve seen improved treatment for diabetes, high cholesterol, ulcers, high blood pressure, and depression. For the most part, we are getting what we are paying for. IBI