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Pharmacy cost increases below medical for the first time in four years

MANAGED CARE December 2005. © MediMedia USA
Managed Care Outlook

Pharmacy cost increases below medical for the first time in four years

MANAGED CARE December 2005. ©MediMedia USA













Prescription costs are expected to increase at a lower rate than medical costs during the next 12 months. This will be the first time in four years that the general pharmacy cost will be lower than medical costs.

So says a survey of 70 health care insurers conducted by Aon Consulting, a provider of risk management services. Prescription drug costs are projected to increase by 11.8 percent, compared to increases of 12.9 percent for medical costs of HMOs and 13 percent for medical costs of POS and PPO plans during the next 12 months.

Bill Sharon, senior vice president of Aon and director of the study, says companies are successfully implementing three-tiered copayment plan designs that are increasing employee use of generic drugs. In addition, many medications are expected to come off patent, increasing the number of generic and over-the-counter drugs that will be available. Sharon also thinks that more employees will be enrolling in consumer-directed health plans. But he does say that "it may take another year or two for insurers to see better trend rates" in consumer-directed health plans.

Percentage increase in costs – pharmacy and medical 2001–2005

Source: Aon Consulting