PHARMACEUTICALS
Increased prescription-drug
use by elderly leading to rising costs
Mark Reutter, Business
and Law Editor
(217) 333-0568; mreutter@illinois.edu
8/1/03
CHAMPAIGN,
Ill. — The big challenge facing the federal government will not be passing
legislation to help the elderly buy prescription drugs, but keeping the costs
of the program from skyrocketing out of control, according to an article in
a University of Illinois law journal.
President George W. Bush pledges to sign legislation that will add prescription
drugs to Medicare, providing relief for 40 million elderly and disabled Americans
covered by the government health insurance program. The U.S. House of Representatives
and the U.S. Senate each passed a version of a plan and are now in the process
of reconciling the two bills.
While the final details of the legislation are still unclear, the real question
is whether any plan will keep the cost of prescription-drug relief to the stated
objective of no more than $400 billion over 10 years. One way to look at prescription-drug
costs is to examine Medicaid, the joint federal-state program that covers prescription-drug
costs for the very poor.
Medicaid payments for prescription drugs have soared in the last decade, according
to the Elder Law Journal, published
by the University of Illinois College of Law.
"Prescription drug coverage is the second-most widely utilized benefit
in Medicaid after hospitalization," Nora Flaherty, an associate editor
at the journal, wrote in the latest issue. "This is due, in great part,
to the elderly and disabled population’s reliance on pharmaceuticals.
In 1998, the elderly and disabled accounted for 80 percent of prescription drug
expenditures."
What makes the figures alarming is that repeated efforts have been made to control
Medicaid’s drug costs. Led by Florida, many state legislatures have required
drug manufacturers to negotiate rebates with the states. The federal government
also has demanded such rebates. Even so, the increase in prescription drug outlays
has outstripped any other component of health care, including hospitalization.
One reason is the sheer quantity of pill consumption by the elderly. Four out
of five Americans 65 and over report taking at least one prescription medicine
a day, and two of three use prescription drugs for a long-term health condition.
Typical prescription drugs taken are for asthma, congestive heart failure, hypertension,
depression, and cancer, especially breast and lung cancer.
Government social programs are not alone. Prescription costs have soared among
private health-care programs. Health maintenance organizations report that expenditures
for prescription pharmaceuticals are increasing at a faster rate than any other
component in health care. While HMOs have tried incentives to cut costs none
has put a noticeable dent in the overall rise.
Increasing public education and changing lifestyles could be long-range measures
to deal with the over-reliance on drugs by both doctors and patients. Reforming
the patent laws to increase competition in the drug business is another needed
reform, Flaherty concluded.