The Soaring Cost of Pharmaceuticals
Prescription drug manufacturers are consistently investing in research and development—with remarkable results. Pharmaceutical advancements are enabling people to lead longer, happier, healthier lives. But such innovations come with a hefty price tag, particularly for those facing chronic or catastrophic illnesses for which specialized medications can be prohibitively expensive. As our population ages, the problem only threatens to get worse, as older patients often are prescribed more long-term medications than the general population.
As organizations struggle to control health care expenditures, the rising cost of prescription drugs poses a significant hurdle. Pharmacy costs account for up to 30 percent of an organization’s overall health care spend. Spending on prescription medicines in the United States is projected to increase 4 percent to 7 percent through 2021, according to Quintiles IMS Holdings, Inc., which compiles data for the pharmaceutical industry. Unfortunately, most benefit managers lack the specialized expertise to manage these rising costs and optimize purchase power.