Prescription Drug Spending Growing Eight Times Faster Than COLA

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Prescription Drug Spending Growing Eight Times Faster Than COLA

TSCL Members Say Congress Should Enact Measures To Lower Drug Costs

Total spending on prescription drugs grew about eight times faster than annual COLAs over the past five years. While actual prices of prescription drugs are increasing about three times faster than COLAs, the growth of total spending is much greater, according to an analysis by Advisor editor, Mary Johnson. Spending increases also reflect increased utilization as doctors prescribe more drugs, or newer, more expensive versions of older ones.

Respondents to TSCL’s 2003 Advisor Senior Survey think Congress should step in to make prescription drugs more affordable—even if that means negotiating prices. Ninety-five percent said that Congress should require drug manufacturers to sell prescriptions to Medicare beneficiaries at the same prices as state Medicaid or Veteran’s Administration programs.

Unsustainable growth in overall health care spending, as well as prescription drugs, was reported by a majority of those responding to our survey. About eight out of every 10 seniors said their spending on health care costs increased in 2002, and more than 30% saw their spending increase by more than 15%.

Respondents also overwhelmingly believe that Congress should enact measures to prevent prescription drug makers from delaying the introduction of generics, and measures that would introduce greater price competition by allowing the importation of FDA–approved drugs from Canada where government negotiated drug prices are often half that charged to U.S. consumers. About 85% favor adding a voluntary prescription drug benefit to Medicare.

2003 TSCL Advisor Senior Survey
How Much Are Your Monthly Health Care Costs Rising?

Percentage Seniors	Amount Their Spending Increased in 2002:
7%	0 - 4%
17%	5% - 9%
26%	10% - 14%
11%	15% - 19%
18%	20% or more
21%	Did not answer

Sources: 2003 TSCL Advisor Senior Survey, July 2003. “Study: Drug Spending Slowed in 1st Q,” Theresa Agovino, The Associated Press, June 3, 2003. “Top Selling Drugs Push Drug Spending Up,” National Institute for Health Care Management Foundation, March 29, 2002.

November 2003