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Projecting future drug expenditures--1999.

B Mehl1, J P Santell

  • 1Department of Pharmacy, Mount Sinai Medical Center, Mount Sinai School of Medicine, New York, NY, USA.

American Journal of Health-System Pharmacy : AJHP : Official Journal of the American Society of Health-System Pharmacists
|February 27, 1999
PubMed
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Drug costs surged in 1998, with prescription drugs seeing a 17.4% increase. Projections indicate continued sharp rises in drug prices for 1999, impacting healthcare costs.

Area of Science:

  • Health Economics
  • Pharmaceutical Policy

Background:

  • The producer price index revealed a significant increase in drug and pharmaceutical prices in 1998.
  • Prescription drug costs, in particular, experienced a substantial rise, exceeding previous annual averages.

Purpose of the Study:

  • To analyze factors influencing drug costs.
  • To project drug cost trends for 1999.

Main Methods:

  • Analysis of producer price index data for drugs and pharmaceuticals.
  • Review of predictions from group purchasing organizations regarding 1999 drug price increases.
  • Examination of managed health care coverage rate predictions and their stated reasons.

Main Results:

  • Drug and pharmaceutical prices increased by 10.2% in the first 10 months of 1998, a sharp rise from 2.1% in 1997.

Related Experiment Videos

  • Prescription drug prices increased by an average of 17.4% in the first 10 months of 1998.
  • Group purchasing organizations forecast 3-8% price increases for various drug categories in 1999.
  • Managed care organizations anticipate 10-12% or higher increases in coverage rates for 1999, citing prescription drug costs.

    • Conclusions:

    • The trend of increasing drug costs observed in 1998 is expected to continue into 1999.
    • Rising prescription drug expenses are a primary driver of increased healthcare and managed care rates.
    • Previous predictions of moderating drug cost increases were not realized, suggesting a sustained period of higher drug prices.