Prescription Drug Costs Will be State Legislatures’ Top Priority Next Year
Prescription drug costs will be the "number one issue" facing state legislatures next year, health officials speculated at last weekend's National Health Policy Conference. Uwe Reinhardt, a Princeton University professor and "renowned" health economist, stated that providing access to pharmaceuticals "is a problem that will only get worse" in the future, given the trend of increased national spending on prescription drugs. Stateline.org reports that in the next eight years, HCFA estimates that the amount of state and local tax money allocated to prescription drug spending outside of Medicare and Medicaid will more than double, rising from $10 billion to $24 billion. Part of the reason for rising costs can be attributed to the replacement of older drugs with newer, expensive versions -- a practice that accounts for an estimated 39% of the increase in consumer spending on pharmaceuticals. Reinhardt said that spending on pharmaceuticals is often highest among the chronically ill and the elderly. To combat escalating spending on pharmaceuticals, Reinhardt proposed several solutions, including one to establish an independent research center to examine whether the "constant flow" of new drugs onto the market results in "benefits that outweigh the costs." Reinhardt also speculated that within the next few years, an increasing number of employers would adopt a payment system modeled on one already existing in Germany. Under that system, drugs are categorized by therapeutic class, health insurers pay a $20 flat rate for medications and consumers pay the remaining cost difference. Reinhardt urged state lawmakers to "kneel on the new president" to implement a prescription drug program for the elderly. If such a program is established, Reinhardt concluded, "in five years, no American would have to go without needed pharmaceuticals" (Guiden, Stateline.org, 12/7).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.