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Prescription drug spending grows

A report says the increase probably is caused by health trends rather than an economic recovery.

By Victoria Stagg Elliott — Posted June 7, 2011

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Americans are using more medications as they get older and larger, according to a recent report.

The 2011 Drug Trend Report by Medco, a pharmacy services company based in Franklin Lakes, N.J., found that prescription medication utilization increased 2.1%. Drug utilization grew only 1.3% in 2009 and decreased by 1.1% in 2008, when the recession was at its peak. The report is available online (link).

But while drug use is increasing at a steady clip, the money spent is growing at a slower pace. Costs per unit went up 1.6%. Drug costs grew 2.4% per unit in 2009 and 4.4% in 2008.

Though the recession helped keep drug utilization down, the authors of the Medco report said that at least when it comes to pharmaceuticals, utilization trends are less connected to economic changes than the declining health of an aging population.

"The population is getting older and the longer you live, the more opportunity you have to develop chronic conditions," said Glen Stettin, MD, chief medical officer and senior vice president at Medco. "And more and more chronic conditions are being treated with multiple drug regimens."

People older than 64 made up 12.4% of the population in 2000, according to the U.S. Dept. of Health and Human Services' Administration on Aging. This grew to 12.9% in 2009 and is expected to increase to 19% by 2030.

The population also weighs more. "Obesity leads to a significant burden of illness," Dr. Stettin said.

Forty-two percent of the adult population was a healthy weight from 1988-1994, according to the Centers for Disease Control and Prevention's National Health and Nutrition Examination Survey. This declined to 32% in 2006.

Diabetes, the greatest contributor to increases in cost and utilization, is closely tied to the growing number of people who are obese, according to Medco. Utilization of diabetes drugs increased 5% in 2010 in comparison to 2009. The amount of money per day spent on diabetes medication grew 2.5% in 2010.

The authors project that spending on diabetes medication will grow from $194 billion to $500 billion by 2020.

The report said a wave of new, branded specialty drugs will push costs higher. However, the costs could be balanced by the increasing number of generics coming onto the market. The report said $50 billion in branded drugs, or 20% of the market, will be open to generic competition between 2011 and 2013.

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