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Health Care Issues

Taking Our Pills

While pharmaceutical companies seem to be holding the line on drug cost-increases, Americans are taking more pills, industry observers say. Price increases for pharmaceutical drugs have lately been inching up less than 3 percent a year. But pharmacies have been filling 5 percent more prescriptions than they did just last year -- and more of them are for high-priced new drugs. In the 12 months ended September 30, Americans spent $93.3 billion for drugs -- up 13.7 percent from a year earlier. Studies have shown that up-front investments in disease management -- including drug therapies -- can reduce overall medical costs for some diseases by as much as 30 to 50 percent. Health insurers and managed-care companies have long known the benefits of early treatment in holding down costs. But they see the current rise in drug usage as negatively affecting profits. Observers say HMOs failed to anticipate drug-makers' success in marketing new therapies. In fact, patients often tell their doctors now what particular drug therapies they want. Industry experts predict that the benefits to patients of earlier and improved therapies will eventually translate into improved bottom-lines for insurers and HMOs. But it may take awhile. Source: Amy Barrett, "Drug Costs Just Won't Go Down Easy," Business Week, November 24, 1997.

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