A leading explanation for the sharp growth in drug expenditures is that prescription drugs are a substitute for other forms of health care. While it is difficult to determine the extent to which this substitution occurs, various studies have associated cost savings with the use of pharmaceutical products in treating specific diseases. Evidence suggests that more appropriate utilization of prescription drugs has the potential to lower total expenditures and improve the quality of care. Also, some studies indicate the U.S. health care system needs to improve the way patients use and physicians prescribe current medications. Prescription drug plans offered by employers are likely to undergo changes to ensure that only the most efficacious drugs are covered.
Anecdotal evidence suggests that copayments for prescriptions are going to increase.
Some health plans are including prescription drug costs in their capitated payments to physicians. Furthermore, prescription drug plans are expected to use formularies more aggressively. Inevitably, this translated to significantly more spending for prescription drugs by the elderly. While prescription drugs are showing sharp price increases, they are also becoming more important in the treatment of many diseases. Consequently, both employers and policymakers must carefully balance the design and cost of a drug benefit so that continual innovation is preserved and the benefit can remain affordable and effective.