US Rx drug costs set to rise 12.6% a year

US health care spending will increase from a record $1,200 billion in1999 to $2,600 billion by 2010, partly because prescription drug costs will increase 12.6% a year on average during the period, say new forecasts from the Health Care Financing Administration, published in the current issue of Health Affairs.

Prescription drug costs totaled $99.6 billion in 1999, to account for 9.4% of personal health spending (which also includes factors such as doctors' visits and hospital stays) and, by 2010, prescription drug spending will have risen to 16 cents on the personal health care dollar, says the study. Moreover, in 1999, US consumers' out-of-pocket spending on prescription drugs totaled $34.9 million, compared with $12.6 billion spent on hospital care and $30.7 billion on visits to doctors and clinics.

Growth in prescription drug usage is due not only to the aging population but also to demand created by direct-to-consumer advertising, and an economic slowdown could mean employers and insurers passing on rising drug costs to consumers, warns the report. There will be trade-offs, lead economist Katherine Levit told the Associated Press, and this will put increased pressure on government, employers and providers to "somehow make choices in terms of how we spend our money."