Healthy Skepticism Library item: 1735

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Publication type: media release

Top-Selling Drugs Push Drug Spending Up 17.1% in 2001
2002 Mar 29

Full text:

Spending on outpatient prescription drugs dispensed through U.S. retail stores and pharmacies grew 17.1% from 2000 to 2001, finds a new study from the National Institute for Health Care Management Foundation.

2001 was the fourth year in a row that spending on prescription medicines escalated 17% or more.

Spending on drugs in the retail marketplace (pharmacies, food and discount stores, and mass merchandisers) rose to $154.5 billion in 2001 from $131.9 billion in 2000. Since 1997, retail spending on outpatient prescription drugs has nearly doubled, from $78.9 billion.

An increase in the sales of a relatively small number of drugs accounted for much of the one-year spending increase. Rising sales of just 50 drugs, out of 9,482 in the retail market, were responsible for 62.3% of the $22.5 billion increase in retail drug spending in 2001.

Sales of those 50 drugs rose 34.3% in 2001 compared to a 9.3% increase for all other drugs. Much of that sales increase was driven by a sharp rise in the volume of prescriptions. Pharmacies dispensed 25.4% more of the 50 drugs contributing most to the increase in sales. By comparison, pharmacies dispensed 1.7% more of all other drugs.

Leading the list of drugs contributing to the one-year increase in sales in 2001 were Lipitor and Zocor, both used to treat people with elevated blood cholesterol levels. U.S. retail sales of Lipitor were up 22.3% to $4.5 billion in 2001; sales of Zocor were up 24% to $2.7 billion. Lipitor was the top-selling drug overall in 2001.

Also driving the one-year $22.5 billion spending jump were sharp increases in the 2001 sales of the arthritis drug Vioxx (up 33.5%), the ulcer drug Protonix (up 490%), the painkiller OxyContin (up 41%), the antipsychotic drug Zyprexa (up 28.6%), and the antidepressant Celexa (up 54.5%).

All other drugs (9,482) accounted for the remainder of the $22.5 billion one-year spending increase from 2000 to 2001.

“Once again, we see that the rise in pharmaceutical expenditures is led by the increased use of a relatively small number of expensive drugs,” says Nancy Chockley, president of the National Institute for Health Care Management Research and Educational Foundation (NIHCM Foundation). “This concentration is both interesting and revealing. It shows us where the new spending is going and perhaps also where we might get the most bang for our buck in savings.”

Antidepressants remained the top-selling category of drug in 2001, with sales of $12.5 billion, up 20.2%. Anti-ulcer drugs (led by Prilosec and Prevacid) were the second biggest sellers as a category, with retail sales of $10.8 billion, up 14.4%.

The study ­ Prescription Drug Expenditures in 2001: Another Year of Escalating Costs ­ found that an increase in the volume of prescriptions was the largest driver of escalating pharmaceutical costs. Retail pharmacies dispensed 3.1 billion prescriptions in 2001, up from 2.9 billion in 2000. This increase was responsible for 39% of the $22.5 billion one-year spending increase in 2001.

The average price of a prescription bought at a retail pharmacy rose 10.1% from 2000 to 2001, to $49.84 from $45.27.

The increase in the price of drugs accounted for a larger share of the overall rise in retail drug spending in 2001 than in recent years. It was responsible for 37% of the rise in expenditures in 2001. In 2000, prices increases accounted for 22% of the one-year increase in retail drug spending. This is largely attributable to an aggregate 6% increase in the retail price for prescription drugs in 2001, compared to an average 3.6% increase per year from 1993 to 2000.

The shift to prescribing more expensive (and mostly new) medicines was responsible for 24% of the one-year rise in retail pharmaceutical spending in 2001. In 2001, for example, the average price of the 50 best-selling drugs was $71.56. The average price of a prescription for all other drugs was $40.11. That price differential is one reason that increases in the sales of the top-selling drugs can have a large impact on retail pharmaceutical expenditures.

The NIHCM Foundation is a Washington D.C. based non-profit organization whose mission is to promote improvement in health care access, management, efficiency and quality.