Drug Spending Up for 5th Year in a Row

May 8, 2001 -- It's not your imagination. The price of drugs is going up.

The average price for a prescription rose 10.5 percent, to $45.27, in 2000, from $40.96 in 1999, according to a healthcare research group's annual drug spending study.

An estimated $1.64 of that $4.31 increase can be attributed to an increase in the price of drugs; $2.67 can be attributed to the shift to use of more expensive drugs.

Spending on about two dozen highly advertised, blockbluster drugs also rose.

23 Drugs, 50 Percent of the Increase

The study found that sales of drugs increased almost 20 percent last year, with 23 drugs responsible for approximately 50 percent of the $20.8 billion one-year rise.

"The recent rise in pharmaceutical spending is due in large measure to the sales growth among a relatively small number of medicines," says Nancy Chockley, president of the National Institute for Health Care Management Research and Educational Foundation, in Washington, D.C., which did the study.

An increase in volume of prescriptions was responsible for an estimated 42 percent of the one-year jump, the study says. The remaining 58 percent was due to a shift to the use of more expensive drugs (36 percent) and an increase in the price of drugs (22 percent).

"Prescription medicines are the best value in health care today, allowing patients to stay out of the hospital, off the surgery table, on the job, and in the home," Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America, said in a statement. "Medicines can prevent serious illness and lengthen life, and this report should be hailed as good news for patients."

Arthritis, Diabetes Drugs, Among Those Responsible for the Rise

Leading the list among the 23, the study says, were Vioxx, for arthritis; Lipitor, to lower cholesterol; Prevacid, for gastroesophageal reflux; Celebrex, for arthritis; Avandia, for type II diabetes; Actos, for type II diabetes; OxyContin, a painkiller; and Glucophage, for type II diabetes.