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Rising Prescription Drug Costs Impact Employee Health Insurance Premiums

According to the National Institute for Health Care Management, spending on prescription drugs rose 18.8 percent from 1999 to 2000. The major portion of the higher costs came from increased spending on a small number of drugs. Just 23 drugs accounted for more than half of the increase in sales. Among those drugs were prescription medicines for arthritis, ulcers, high cholesterol and diabetes.
Rising pharmaceutical costs continue to represent a large and growing portion of healthcare costs. Consumers are demanding and physicians are prescribing a higher volume of medicines every year. The primary causes for the cost increases are:

• Aging of the population

• Long-term therapies

• Changing guidelines for disease diagnosis and treatment

• Introduction of new drugs

• Approval of drugs for more than one indication

• Increased third party coverage of prescription drugs

• Pharmaceutical marketing, including Direct-to-Consumer advertising
  
  Depending on items such as demographics, member cost share, level of clinical management and plan design, drug spending costs of 20% or more will be increasingly common. For ways to help your company combat rising prescription drug costs, contact one of our Benefits specialists.
  (Reprinted with permission of Advanced PCS - the nation's largest Prescription Benefits Manager)