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Projecting future drug expenditures--2003.
Nilay D Shah1, James M Hoffman, Lee C Vermeulen
1Center for Drug Policy, University of Wisconsin Hospital and Clinics (UWHC), 600 Highland Avenue, Room F6/133-1530, Madison, WI 53792, USA.
Summary
US drug expenditures are projected to increase by 10-15.5% in 2003 due to an aging population, technological advances, and new drug approvals. Careful budgeting is essential for managing rising pharmaceutical costs.
Area of Science:
- Health Economics
- Pharmaceutical Policy
- Public Health
Background:
- US health expenditures are rising faster than total healthcare spending.
- Drug costs are increasing due to an aging population and technological advancements.
Purpose of the Study:
- To project drug expenditure increases for 2003.
- To identify key factors influencing pharmaceutical costs.
- To provide guidance for drug budgeting.
Main Methods:
- Analysis of price inflation and non-price factors (volume, therapeutic intensity).
- Consideration of new drug approvals and diffusion of existing ones.
- Forecasting based on demographic and market trends.
Main Results:
- Projected drug expenditure increase of 10-12% (inpatient) and 13.5-15.5% (ambulatory) for 2003.
- New drugs like drotrecogin alfa and nesiritide will significantly impact costs.
- High-cost HIV drug enfuvirtide may limit patient access.
Conclusions:
- Technological, demographic, and policy changes will continue to drive pharmaceutical spending.
- Effective management requires understanding expenditure drivers and monitoring innovation.