A research team at the School of Pharmacy has found that while newer drugs comprise 45 percent of those most frequently prescribed, they are responsible for 75 percent of overall drug spending increases.
http://www.newswise.com/articles/2001/9/DRUGCOST.UMB.html
14-Sep-01
When it comes to prescription drugs,
newer may be better but also more expensive.
A research team at the School of
Pharmacy has found that while newer drugs comprise 45 percent of those
most frequently prescribed, they are responsible for 75 percent of overall
drug spending increases.
The study, sponsored by the Health
Insurance Association of America and the Blue Cross/Blue Shield Association
and just published in the journal Health Affairs (Vol. 20 No. 5, September-
October 2001), examined the impact of new drugs on the market. The study
focused on the relationship between health care spending increases and
the appearance of new and more expensive drugs. Researchers identified
two factors by which newly approved drugs have great impact on increases
in drug spending: product shift and changing utilization patterns.
"Product shift and changes in utilization
greatly affect what Americans pay for medications," says study co-author
C. Daniel Mullins, PhD, associate professor at the School of Pharmacy.
"Product shift occurs when new drugs replace older drugs and the newer
drugs are more expensive. Also, newer drugs are often utilized more."
Previous reports from the Health
Care Financing Administration, now called the Centers for Medicare and
Medicaid Services, documented that prescription drugs are the fastest rising
component of health care costs, yet there has been uncertainty about the
impact of newly introduced drugs. The Maryland study, however, firmly documents
that new drugs have a significant impact on rising health care costs, with
product shift and changes in utilization patterns being major contributors.
Researchers concluded that new drugs in the "pipeline" could boost national
drug spending to $216 billion by 2004.
Their study also noted that drug
spending growth rates from 1995 to 1999 were more than twice the growth
rate of overall health care spending. Estimating the impact of pipeline
drugs and those newly released needs to be taken into account, they concluded,
if health care systems want to track drug cost trends and prepare for the
future.
"Consideration of pipeline drugs
is imperative for understanding and projecting future drug trends," says
co-author Francis B. Palumbo, PhD, JD, professor in the School of Pharmacy
and director of The Center on Drugs and Public Policy. "Innovative drugs
in the pipeline will assist previously untreated patients. However, how
we will pay for new, more expensive treatments is one of the most important
questions we face."
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