Drug prices between 1998 and 1999 rose 19 percent, more than twice the rate of overall health care costs.
Observers cite several factors behind the trend, which has caught the attention of policymakers.
New Drugs and Technology Rapid technological innovation is leading to better drugs but at a steep price. Advances in research and clinical practice have led to earlier diagnosis and treatment of some common conditions, while drugs with fewer side effects and interactions are encouraging more aggressive therapies. Biotechnology Biotechnology drugs are contributing heavily to the dramatic increase in drug prices because of their high costs and rapid market growth. Just six months later, there are an additional 450 drugs awaiting approval. Physician prescribing behavior Under influence from drug companies and patients who request medications by brand name, physicians are prescribing more expensive drugs.