Prescription Drug Pricing Pathfinder
Current Spending and Recent Price Increases

Retail drug spending increased 84 percent between 1993 and 1998, according to the nonprofit National Institute for Health Care Management (NIHCM). The federal Health Care Financing Administration (HCFA) estimates that Americans spent over $100 billion on prescription drugs in 1999, and projects that amount will double to over $200 billion per year in 2006. (Click here to link to HCFA's projections.) Between 1993 and 1998, spending nationwide for prescription drugs increased at an annual rate of 12 percent compared to about 5 percent for all other types of health spending, according to the April 10, 2000 President's Report on "Prescription Drug Coverage, Spending, Utilization, and Prices."

One might think that with so many agencies and organizations tracking health care spending and pricing, there would be some sort of consensus on what the statistics are. Not so. It's something of a jungle out there, but following are some useful sources for information on pharmaceutical spending and pricing.

Sources of information on Pharmaceutical Spending and Pricing:

• The Journal Health Affairs published an entire issue devoted to prescription drugs in March/April, 2000. Health Affairs is a highly-regarded, peer-reviewed journal covering health policy and managed care. It has been published since 1981 by the nonprofit foundation Project HOPE. Some articles from the prescription drug issue are available full-text online. Topics include:
  
  - The proposed federal Medicare drug benefit
  - Direct-to-consumer prescription drug advertising
  - Drug-spending trends
  
  Click here to link to Health Affairs' prescription drug issue table of contents.
  

  Contact Health Affairs at:
  7500 Old Georgetown Road, Suite 600
  Bethesda, MD 20814
  Phone: (301) 656-7401 / Fax: (301)654-2845

• The National Institute for Health Care Management (NIHCM), a nonprofit research foundation dedicated to improving health care financing and delivery, produced an excellent publication in July, 1999 entitled "Factors Affecting the Growth of Prescription Drug Expenditures." The report has been widely cited. The report and an addendum issued shortly after the completed report is available on NIHCM's publication page.
  
  Contact NIHCM at:
  1225 19th Street, NW, Suite 710
  Washington, DC 20036
  Phone: (202) 296-4426 / Fax: (202) 296-4319
  
  
  
• The federal Health Care Financing Administration (HCFA) tracks many health care cost indicators, including the price of prescription drugs. HCFA publishes a medical consumer price index, showing year-to-year changes in nationwide spending on prescription drugs and other medical items. The figures are presented as percentage increases, with the base year being 1982-1984.
  
  Contact HCFA at:
  7500 Security Boulevard
  Baltimore, Maryland 21244
  Phone: (410) 786-3000
  
  
• The federal Department of Health and Human Services (DHHS) issued a report in April, 2000 entitled "Prescription Drug Coverage, Spending, Utilization, and Prices" (noted above). The report evaluates drug costs and trends for Medicare beneficiaries and also includes a good deal of information on drug costs and trends for the non-Medicare population.
  
  Contact DHHS at:
  Hubert H. Humphrey Building
  200 Independence Avenue SW
  Washington, DC, 20201
  
  
• The CQ Researcher, a subscription-only publication, produced an excellent piece entitled Drug Pricing and Approval, dated 9/3/99. The source for a good deal of the information produced in the guide was the NIHCM report listed above. CQ ("Congressional Quarterly"--although they now publish weekly) publications are well-written and very readable; if you have access to a copy of the drug pricing report it is an excellent introduction.
  
  Contact CQ at:
  (800) 432-2250, ext. 279
  
  
• The National Association of Chain Drug Stores (NACDS) is a good source for quick-and-dirty pricing info. See especially NACDS's Industry Facts-at-a-Glance page. (Click the link on the left side of the page after you link from here.) NACDS represents chain drug stores, which NACDS says fill about 60% of all prescriptions.
  
  Contact NACDS at:
  413 N. Lee Street
  P.O. Box 1417-D49
  Alexandria, VA 22313
  Phone: (703) 549-3001
  Fax: (703) 836-4869
  
  
  
• Bill Delahunt, a Congressman from Massachusetts, commissioned a study of the differences between drug prices in the U.S., Canada, and Mexico for the House Committee on Government Reform. The study, entitled "Prescription Medications in Southeastern Massachusetts: An International Comparison," dated 11/29/99, compared the retail price of five common drugs in Massachusetts, Canada, and Mexico. The study can be opened as an Adobe Acrobat file from Congressman Delahunt's web page. Because the Canadian - US comparison is so often invoked, I am summarizing the results of Congressman Delahunt's study here, to give the reader some background (note all prices are given in US dollars):
  
  

  Drug	Prescription Size	Canada / Rx	Mexico / Rx	Massachusetts / Rx
  Zocor (cholesterol lowering drug)	5 mg, 60 pills	$ 46.17	$ 67.65	$ 115.21
  Prilosec (ulcer drug)	20 mg, 30 pills	$ 55.10	$ 32.10	$ 121.15
  Procardia XL (heart medicine)	30 mg, 100 pills	$ 74.25	$ 76.60	$ 144.94
  Zoloft (depression)	50 mg, 100 pills	$ 129.05	$ 219.35	$ 237.00
  Norvasc (high blood pressure)	5 mg, 90 pills	$ 89.91	$ 99.32	$ 128.21

  
  Congressman Delahunt also released a study on February 22, 2000, showing that certain drugs are priced much lower when prescribed for pets rather than humans, and a study on May 3, 1999, comparing the price paid by uninsured consumers versus large purchasers like HMOs. (Both reports are available on the same site).
  
  Contact Congressman Delahunt at:
  1317 Longworth House Office Building
  Washington, DC 20515
  Phone: (202) 225-3111 / Fax: (202) 225-5658
  
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