Pharmaceuticals offer medical bargain

January 1, 2002

Pharmaceutical Representative

A new report finds that pharmaceuticals are more cost-effective for the healthcare system than other, more invasive forms of medical intervention.

A new report released by the Washington-based trade organization Pharmaceutical Research and Manufacturers of America finds that pharmaceuticals are more cost-effective for the healthcare system than other, more invasive forms of medical intervention.

The report, "The Value of Medicines," looks at medicines currently available to treat cancer, AIDS, arthritis, mental illness and other conditions, as well as the cost benefits of pharmaceuticals and new drugs in the research pipeline.

"Whether you measure their value in terms of lives saved and quality of life improved or in terms of actual dollar savings, you cannot find a better value in healthcare," said Alan Holmer, president of PhRMA. "This should be an eye-opener for people who focus myopically on the cost of prescription drugs and ignore their value. You cannot discuss the cost of medicine without considering the value it provides to patients and the money that may be saved from other forms of healthcare like hospitalization."

Report highlights

The report reveals that:


• A $1 increase in spending in pharmaceuticals is associated with a $3.65 reduction in hospital costs.


• Every dollar spent on vaccines for measles/mumps/rubella saves the healthcare system $21.


• A drug that can reduce the incidence of breast cancer in women costs $1,050 per year, while the average cost of surgery or other invasive treatments for breast cancer is $14,000 per year.


• Greater use of ACE inhibitor drugs for patients with heart failure could reduce deaths and save as much as $2 billion per year.


• A new Alzheimer's medicine reduced annual treatment costs by $1,000 per patient, according to a study conducted in five European countries.

Holmer said that the report will add evidence to the debate over pharmaceutical costs. "There's much more to considering the cost of medicines than just the price tag on the pill bottle," Holmer said. "Any responsible debate should include the value and savings that these medicines provide." PR

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