Drug spending soars. (Short Takes: News at Deadline).A new study by Express Scripts Inc., one of the nation's largest pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. companies, found that spending on prescription drugs prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, rose by 17.4 percent last year, with seniors being the hardest hit. The study revealed that the increase was due to rising drug prices, increased use of drugs, and a switch to newer, more expensive drugs. The 17.4 percent increase is the sharpest jump in drug outlays since Express Scripts began collecting such data in 1993. The average cost of a prescription rose by 9.6 percent in 1999, and per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. outlays for drugs grew from $329.83 per year in 1998 to $387.09 in 1999. Prices paid by the elderly grew even more rapidly. For seniors between the ages of 70 and 79, the average cost of a prescription increased by 14 percent. For seniors 80 years of age and older, the average cost jumped by 16.4 percent. The researchers found that pharmaceutical companies did have some success in driving demand for their products by promoting them directly to consumers. They boosted their television advertising by a whopping 70 percent in 1999 to $1.1 billion. Express Scripts expects these spending trends to continue, with per member outlays doubling over the next five years to $758.81. Eventually, they expect the growth rate to slow due to regulatory pressures and a scarcity Scarcity The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently. of new blockbuster drugs A blockbuster drug is a drug generating more than $1 billion of revenue for its owner each year. The search for blockbusters has been the foundation of the R&D strategy adopted by big pharmaceutical companies, but this looks set to change. in the pipelines of drug makers. |
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