Pharmaceuticals--cost or investment? An employer's perspective

Employers are becoming increasingly concerned about rising pharmaceutical costs. Are improved health and cost outcomes achieved as a result of increasing pharmaceutical costs? One should approach this issue with a holistic view that considers the overall impact that disease conditions have on health and productivity. To illustrate, we first identified the "top ten" most expensive physical and mental health concerns facing American businesses, using data from over 60 firms from the 1996 MarketScan Private Pay Fee-For-Service Research Database. For some of these top ten conditions, the literature already addresses the drug cost versus investment issue, with mixed results. For conditions in which uncertainty prevails and for other high-cost conditions, empirical analyses should address the drug cost versus investment issue to minimize the risk of a penny-wise and pound-foolish payment/coverage policy. A similar strategy should be applied to individual corporate diagnostic assessments.