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Prescription prices rise faster after recession

MANAGED CARE April 2011. © MediMedia USA
The Formulary Files

Prescription prices rise faster after recession

Economic uncertainty, job loss, and declining insurance coverage all led to a marked slowdown in prescription utilization in 2008, but that downturn is reversing as the economy slowly picks up. According to the CVS Caremark report Insights 2010: Evolving Pharmacy Care, there was a slow rise in prescription utilization in 2009 as consumer confidence returned — Americans were once again restocking their medicine cabinets.

The report identifies the 2009 flu season as a factor in the uptick, but families may have responded to anticipated copayment increases in 2010 and the ending of COBRA subsidies. Health plans, in response to the economic difficulties faced by families, made few changes in member contribution levels. In fact, the report says member contributions declined, going from 19 percent in 2008 to 15.7 percent in 2009.

While utilization rates were on the rise from 2008 to 2009, the report cites prices of branded pharmaceuticals as a major driver of health plan drug costs — prices for branded pharmaceuticals increased at more than twice the rate of general inflation. In contrast, prices for generic drugs continued to decline.

Price of branded drugs is a major driver of costs

Source: CVS Caremark report, Insights 2010: Evolving Pharmacy Care