Thursday, July 08, 2004
Costs and benefits in the prescription drug market
["Value of prescription drugs," NCPA Daily Policy Digest, 8 July 2004.]
This item from today's NCPA Daily Policy Digest explains that there is a difference between what is seen and unseen. Even if prescription drug costs were rising at some outrageous level, a discussion of these costs would only be relevant to the extent that tradeoffs are included:
Politicians and activists who decry the high prices of prescription drugs often mention pharmaceuticals’ cost, but never their true value, says Kerri Houston, vice president of policy for Frontiers of Freedom.
Not only are prescription prices increasing slower than overall medical costs, she says, but prescription drugs often save money by offering alternatives to costly hospital stays and procedures:
- Drugs only account for 10 cents out of every health care dollar, and drug prices have been increasing by about 4 percent annually, below overall medical inflation.
- One study showed that patients on new congestive heart failure drugs avoided almost $9,000 in hospital costs over a three-year period, with potential nationwide savings of nearly $2 billion a year.
- Some $1.1 billion is spent on diabetic amputations every year, many of which are preventable through medication therapy.
["Value of prescription drugs," NCPA Daily Policy Digest, 8 July 2004.]
This item from today's NCPA Daily Policy Digest explains that there is a difference between what is seen and unseen. Even if prescription drug costs were rising at some outrageous level, a discussion of these costs would only be relevant to the extent that tradeoffs are included:
Politicians and activists who decry the high prices of prescription drugs often mention pharmaceuticals’ cost, but never their true value, says Kerri Houston, vice president of policy for Frontiers of Freedom.
Not only are prescription prices increasing slower than overall medical costs, she says, but prescription drugs often save money by offering alternatives to costly hospital stays and procedures:
- Drugs only account for 10 cents out of every health care dollar, and drug prices have been increasing by about 4 percent annually, below overall medical inflation.
- One study showed that patients on new congestive heart failure drugs avoided almost $9,000 in hospital costs over a three-year period, with potential nationwide savings of nearly $2 billion a year.
- Some $1.1 billion is spent on diabetic amputations every year, many of which are preventable through medication therapy.
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