While pharmaceutical companies seem to be holding the line on drug cost-increases, Americans are taking more pills, industry observers say. Price increases for pharmaceutical drugs have lately been inching up less than 3 percent a year. Health insurers and managed-care companies have long known the benefits of early treatment in holding down costs. But they see the current rise in drug usage as negatively affecting profits.
Observers say HMOs failed to anticipate drug-makers' success in marketing new therapies.
In fact, patients often tell their doctors now what particular drug therapies they want. Industry experts predict that the benefits to patients of earlier and improved therapies will eventually translate into improved bottom-lines for insurers and HMOs. But it may take awhile.