Express Scripts Reports Record Rx Spending per Member in '99

Article excerpt

Total drug spending on Express Scripts members soared in 1999 to a whopping $387.09 per fiber per year (PMPY), a record 17.4% increase from 1998's $329.83. These figures, representing the average wholesale price (AWP) ingredient costs, were released as part of the 1999 Drug Trend Report, an annual analysis performed by Express Scripts Inc., at its fourth annual Outcomes Conference in St. Louis. The independent pharmacy benefit manager serves over 38 million Americans.

The 17.4% rise in spending on prescription drugs is attributed mainly to a 9.6% increase in the average cost per prescription, but greater drug utilization and spending on new drugs are also key players. The analysis, based on a survey of 8.8 million members in 1998 and 9.6 million members in 1999, found that the rate of Rx use is up 6.2% since last year; the average member now uses 8.21 prescriptions over last year's 7.73.

Senior citizens were the hardest hit of all age brackets; average Rx costs rose by 14% in the 70-79 age bracket and 16.4% for seniors 80 and above. Barrett Toan, CEO of Express Scripts, commented that due to complex utilization patterns and heavy reliance on Rx drugs, "providing [seniors] with drug coverage is one of the biggest challenges currently on the pharmacy landscape."

The 1999 Drug Trend Report also included projections for future spending increases. Although the 2000 increase is projected to be still higher-at 17.6%-the rate of increase is expected to fall, due to greater political pressures. The estimate for 2001 is a 16.5% increase, a smaller 13.4% in 2002,12.5% in 2003, and 12.1 % in 2004. The primary author of the report, Fred Teitelbaum, Ph.D., vp. for outcomes research and cost management at Express Scripts, remarked that these results "translate into a near doubling" of PMPY costs-from $387.10 in 1999 to $758.81 in 2004.

The key cost drivers for future expenses will be the continued supply of new drugs coming to market, the unabated demand for Rx drugs, and higher consumer demand stimulated by the heavily financed direct-toconsumer Rx drug marketing. …