Study Shows Drug Prices Have Doubled in Last 3 Years

Think the government is right in saying that drug expenditures are rising at double-digit rates? Well, such statistics don’t show the half of it, says a study sponsored by a new advocacy group, RxHealthValue.

Spending on prescription drugs has more than doubled in the last three years among the people studied by RxHealthValue, rising from $204 annually per person to $436.

While government figures ordinarily include those who have insurance and those who don’t, the Rx group’s sample of 1.4 million contained only people with insurance, which typically includes a prescription plan. Among these people, drug costs are rising by about 25% a year.

And the Rx numbers show that if you’ve got drug benefits, you’re likely to use them. And use them. And use them:

* The number of people using prescription drugs grew 3.5% a year, from 60% of the overall sample to more than 66%. This trend was greatest among people ages 45 to 65.

* The number of prescriptions per person grew 14% annually. In the most extreme case, the typical person 65 or older received 23 prescriptions in 1999, compared with 16 in 1996.

* Once patients start taking a drug, they take it longer--30 days, or 12% longer in 1999 than in 1996.

RxHealthValue, a coalition whose members include health insurers, labor unions and employers, aims to assess the value, not just the price, of prescription drugs. Its study was conducted by a Brandeis University institute and PCS Health Systems, a coalition member that is a subsidiary of Rite Aid.

Inflation did not add significantly to the spending increase. But new drugs--medications that came on the market after the study began--played a huge role in the higher spending. These new drugs accounted for more than one-third of the overall increase.