Copyright 2000 Newsday, Inc.
Newsday (New York, NY)
June 28, 2000, Wednesday NASSAU AND SUFFOLK
EDITION
SECTION: BUSINESS & TECHNOLOGY; Page A57
LENGTH: 507 words
HEADLINE:
STUDY: SPENDING FOR DRUGS UP 17.4% IN U.S.
BYLINE: By
Christian Murray. STAFF WRITER
BODY:
Average spending for prescription drugs rose a whopping 17.4 percent per
person in 1999, according to a recent report. And senior citizens were stung the
most by the increase.
The study, released this week by Express Scripts,
a St. Louis-based benefits management company, found that over one-third of the
increase can be attributed to the higher per-person consumption of drugs. Price
inflation of existing drugs represented about 30 percent of the increased costs,
while new drugs accounted for approximately 10 percent. The overall rate of
inflation hovered around 3 percent last year. The study's findings were based on
the spending habits of 9 million of the nearly 40 million workers whose
prescription drug benefits are managed by Express Scripts.
The average
drug cost per person rose to $ 387.09 in 1999, up from $ 329. 83 in 1998,
according to the report. Increased use of antihyperlipidemics, antidepressants
and gastrointestinal products accounted for $ 10.47 of the total $ 57.26
increase. "There is also a movement away from the less expensive drugs, such as
penicillin, to the higher expensive drugs," said Barret Toan, president of
Express Scripts.
The elderly saw per-person costs go beyond 20 percent,
the report concluded. Toan said the increase can be attributed to factors such
as costly new drugs, such as COX-II, an anti-rheumatic medication. Additionally,
existing drugs such as estrogen replacement drugs and thyroid replacement
medications-drugs often used by the elderly-also experienced double-digit price
inflation.
Craig Copeland, senior research associate for the Employee
Benefit Research Institute in Washington, said in 1998 that the average amount
spent on prescriptions by the 65-year-plus age group was $ 687 compared with $
240 for the average 35- to 44-year-old. Given the amount the elderly spend on
drugs, he said, it came at no surprise that they would be hurt most.
But
Toan said the increased prescription costs can be be cut in half with
prescription management. This occurs only when consumers are provided with
monetary incentives-such as reduced co-pays-to use less-expensive generic drugs,
as opposed to the high-cost brand name drugs. Other management measures, which
can cut costs by up to one-third, include steering customers to mail-order or
online prescription sources.
But analysts say that many people don't
like waiting two days for the mail to arrive. And the online market has been
slow to take off, Toan acknowledges.
A recent study released by
International Data Corporation, an e-commerce research company based in
Framingham, Mass., expects online prescription sales to grow to $ 14.8 billion
by 2004-a small slice of the approximately $ 150-billion prescription market.
Jim Williamson, senior research analyst at IDC, said that the Internet
is not helping the elderly much right now. "The elderly are not technology-savvy
right now-and there are some hurdles to overcome," he said.
LOAD-DATE: June 28, 2000
