Prescription drug costs

Asthma is also a significant economic burden in the United States, costing 12.7 billion in 1998 with direct medical expenditures accounting for 58% of the cost or approximately 7.4 billion.5 Hospital and emergency department care accounted for 45.1% of the direct medical expenditures, with prescription drugs and physician office visits accounting for 43.3% and 11.6%, respectively. Costs appear to increase with disease severity, and it has been suggested that fewer than 20% of asthma patients account for more than 80% of direct medical expenditures.5... 

More recently, large databases have been used to estimate the effect of drug co-payment in the USA under different insurance schemes.10 The conclusion reached is that there is a significant interaction effect between the behaviour of demand and prescriber incentives. Thus, larger prescription drug copayments are associated with lower expenditure when the doctor does not share the financial risk of the cost of the drugs (that is, practises in an independent practice association) but this effect is barely perceived in managed care models in which the doctor has incentives for cost containment. 

Lyles, A. and F.B. Palumbo (1999), The effect of managed care on prescription drug cost and benefits , PharmacoEconomics, 15, 129—40. 

A few studies have examined the impacts of Medicaid and non-Medicaid copayments on drug utilization and health care costs. In a 1993 study, Reeder et al. noted an 11% decrease in prescription use after South Carolina established a 50-cent per prescription copayment. This increase was significantly greater than in Tennessee, a comparison state with no copayments (Reeder et al., 1993). Another study using survey data from the 1992 Medicare Beneficiary Survey found that elderly and disabled Medicaid beneficiaries who live in states with prescription drug copayments have lower prescription drug utilization than their counterparts in states without copayment, and three-fourths of the difference was directly attributed to copayment policies. The study predicted that Medicaid copayments... 

Cost Sharing. Most states impose cost sharing on patients in the form of copayments ranging from fifty-cents to five dollars. In 1996, 29 states and the District of Columbia had adopted prescription drug copayments for all... 

Pharmaceutical Research and Manufacturers of America. Why Do Prescription Drug Cost So Much PhRMA, Washington, DC, 2000. 

Excessive total costs for prescription drugs. Insurers and other third party payers see drugs as the fastest-rising component in total health... 

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