Prescription Drugs: Continued Rapid Growth

Abstract

Prescription drug expenditures have come to the forefront of the debate over health care in the United States. While expenditure growth has slowed for the other major sources of health care--hospital services and physician services--prescription drug costs have continued rising at double-digit rates, as they did throughout the 1990s. Consequently, many employers are planning to revise or have revised their drug benefits by changing copayment levels and/or introducing formularies (lists of preferred or covered drugs in a drug benefit plan), or refining those already in use. This article summarizes the latest national health expenditure data on prescription drug expenditures, with a particular focus on the components that have contributed to the growth in these expenditures. In addition, it examines recent features that have been added to employers' drug benefit plans and their prevalence of use.

The PDF for the above title, published in the September 2000 issue of EBRI Notes, also contains the fulltext of another September 2000 EBRI Notes article abstracted on SSRN: "Pension Coverage: Examining CPS Data."

Keywords: Employment-based benefits, Health care costs, Prescription drug costs

JEL Classification: I1