Cost of prescription drugs climbs

September 1, 1998

Pharmaceutical Representative

Prescription drug costs rose a record 16.1% in 1997, according to a recently released report from Express Scripts/Value Rx, St. Louis.

Prescription drug costs rose a record 16.1% in 1997, according to a recently released report from Express Scripts/Value Rx, St. Louis.

According to the report, the average wholesale price ingredient cost per member per year reached $282.48. In contrast, the cost per member per year in 1996 was $243.51; in 1993, it was $180.25.

Analysts attributed the rise to patients' increasing consumption of common products, the rising cost of prescription ingredients and a general preference for newer, more expensive products.

For example, use of common drugs, such as antihistamines, antidepressants, antihypertensives and drugs related to women's health, rose 4.5% last year. The rate of increase, Express Scripts/Value Rx reported, was more than twice the rate of increase between 1995 and 1996.

"We believe prescription drug costs will continue to grow by 12% and 16% for the remainder of the millennium," predicted Barrett Toan, the CEO of Express Scripts/Value RX.

Reports of small increases from the first quarter of 1998 to the second quarter appear to support an incline in prices. Plymouth Meeting, PA-based IMS Health reported that the annual rate of change for prices of branded pharmaceuticals were up 0.3% points in May, and that the current rate of change is 0.5% higher than annual figure reported for the first quarter of May.

However, Myron Holubiak general manager of The Plymouth Group, IMS Health's consulting arm, disputed the notion that prices are rising significantly.

"Contrary to recent reports of double-digit increases for prescription drugs, the industry has maintained a conservative posture in drug price increases," Holubiak said. "It's questionable if the market basket approach reflects the true impact of drugs since the newer therapies may be providing significant incremental benefit that is not captured in these types of analyses." PR