News / 

Prescriptions Cost Patients 18.5 Percent More in 2002 Over 2001

Save Story

Estimated read time: 4-5 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

It's enough to give a cost-conscious employer a throbbing headache: Express Scripts Inc. said prescription costs rose 18.5 percent in 2002 - the biggest annual increase in the nine years the pharmacy-benefits manager has been mining its large database for drug trends.

Spending for prescription drugs increased to $585.60 per member per year, up from $494.20 in 2001. But the pain felt by Express Scripts' clients varied according to how aggressive they were at implementing cost controls.

Express Scripts, based in Maryland Heights, Mo., said clients who implemented a third-tier drug benefit - requiring members to pay the most for non-preferred brands, a moderate amount for preferred brands on a formulary or preset list, and the least for generics - held drug-cost increases to 7 percent on average.

The patents on a number of blockbuster drugs have run out in recent years, and more are set to expire. Already, generics are available for blockbusters to treat depression, diabetes, hypertension and gastrointestinal disorders.

Express Scripts expects lower-cost generics to claim a larger share of the market, and this will be important in moderating the pace of overall drug increases.

Still, the future looks expensive. The company's forecasts call for per-member, per-year drug costs to grow by 107 percent over the next five years, reaching a hefty $1,212.45 in 2007. Continued drug-cost increases, mixed with the growing health concerns of an aging population, will propel drug spending.

Express Scripts was to release its 2002 Drug Trend Report today at an annual two-day conference at St. Louis Union Station.

The conference typically draws 800 to 1,000 delegates from the employers, unions and health insurers that use Express Scripts to keep drug costs in line by promoting generics over brand-name prescriptions, mail-order services over retail pharmacies, and low-cost over high-cost brands on its drug formularies.

The drug trend report is based on a sample of Express Scripts' 50 million members. It includes roughly 1 million members enrolled in HMOs and 2 million covered by insurance plans that are self-funded by large and small employers.

The data doesn't include the cost of drugs given to hospitalized patients, and it excludes groups and individuals covered by Medicaid and Medicare, the large government insurance programs.

Express Scripts said about 5 percent of those in the data sample accounted for 50.7 cents of every dollar spent on drugs. Ten percent of the sample group consumed 69.7 cents of the drug dollar. One-third of those in the sample used more than one prescription a month, while 41.3 percents didn't use the benefit at all in 2002.

Fred Teitelbaum, head of research and planning for Express Scripts, said the average cost of a prescription increased 10.5 percent in 2002 over 2001.

The 18.5 percent increase in per-member per-year costs weights the rising cost of drugs, an increase in the average number of prescriptions written per member a month, and a slight increase in the use of more-expensive drugs when less-expensive drugs are available within the same therapeutic class. The increase was offset somewhat by cost savings tied to an increased use in generics.

Price increases from drug makers accounted for 43.4 percent of the increased drug spending from 2001 to 2002. Another 34.2 percent was related to an increase in the number of prescriptions written.

New drugs introduced in 2002 accounted for only 5.3 percent of the increase. Changes in therapeutic mix - the use of stronger drugs or more-expensive drugs when a lower-priced drug is available - made up 18.5 percent of the increase.

The introduction of new generics and the ensuing shift from high-cost brands saved 2.1 percent from the amount Express Scripts clients otherwise would have spent in 2002.

The effect continues and is growing, according to Express Scripts. Greater use of generic drugs reduced the dollar outlay for prescription drugs by 3.2 percent in the first quarter of 2003 compared with the comparable quarter last year.

In the first quarter, ending March 31, 47 percent of all prescription claims processed by Express Scripts were for generic drugs. This compares with 43 percent in the first quarter of 2002.

Growth in prescription spending slowed to 11.3 percent during the first quarter. Express Scripts attributes the lower rate of spending growth to the influence of generics and the benefits of a mild flu season. Concerns over safety caused a drop off in the use of estrogen-replacement drugs.

Barrett Toan, Express Scripts chief executive, said the drop in prescription antihistamine and cough-and-cold products and hormone-replacement therapies were one-time events. Toan said that aggressively promoting the use of generic drugs will have a continued moderating effect on drug price increases.

In its drug-trend report, Express Scripts said that the top six categories of drugs used by members were antihypertensives to reduce blood pressure; mood-altering antidepressants; antihyperlipidemics to control cholesterol; gastrointestinals for digestive disorders; narcotic analgesics for pain relief; and diabetes medications.

The top five therapy classes when ranked by cost are gastrointestinals, antihyperlipidemics, antidepressants, antihypertensives and non-steroidal anti-inflammatories often used for arthritis pain.


(c) 2003, St. Louis Post-Dispatch. Distributed by Knight Ridder/Tribune News Service.

Most recent News stories


Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the Trending 5.
By subscribing, you acknowledge and agree to's Terms of Use and Privacy Policy.

KSL Weather Forecast