WASHINGTON, D.C. - America's seniors, struggling to keep up with the rapid rise in prescription drug costs, will face an even bigger problem in the next 10 years as their average drug bills are projected to more than double, according to a new report released today by Families USA, the national organization for health care consumers.
The report, "Cost Overdose: Growth in Drug Spending for the Elderly," is the first study to both analyze the increase in prescription drug spending for the elderly from 1992 to 2000 and to project further increases over the next 10 years. The report tracks the rise in prescription drug spending and other relevant measures of the problem from 1992 through 2000 and projects further increases through 2010.
"By every measure, seniors' drug spending is skyrocketing and will continue unabated in the next decade," said Ron Pollack, executive director of Families USA. "With each passing year, the number of drugs provided for seniors is growing quickly, the prices per prescription are rising ever more rapidly, and drug costs are consuming ever-larger portions of seniors' health care spending.
"Only by creating a drug benefit in Medicare can we guarantee needed prescription drug coverage and take advantage of Medicare's market clout to keep drugs affordable."
Some of the key findings of the new report:
(1) Annual spending on prescription drugs per elderly American will grow from $559 in 1992 to an estimated $1,205 in 2000, an increase of 116 percent. By 2010, annual prescription drug spending per elderly American is projected to increase to $2,810, a jump of 133 percent over this year and more than 403 percent higher than 1992.
(2) The average number of prescriptions per elderly person will grow from 19.6 in 1992 to 28.5 in 2000, an increase of 45 percent. That average number of prescriptions is projected to grow to 38.5 in 2010, an increase of 35 percent over 2000. From 1992 to 2010, therefore, the average number of prescriptions per senior will grow by 96 percent.
(3) The total number of prescriptions for seniors will grow from 648 million in 1992 to more than 1 billion in 2000, and that number is projected to jump to 1.6 billion by 2010.
(4) The average cost per prescription for the elderly will grow from $28.50 in 1992 to $42.30 in 2000, an increase of 48 percent. By 2010, the projected average cost per prescription will be $72.94, an increase of 72 percent over this year's average and 156 percent higher than the 1992 average.
(5) Total prescription drug spending for seniors will grow from $18.5 billion in 1992 to $42.9 billion in 2000, an increase of 132 percent. By 2010, that spending is projected to reach $113.6 billion, an increase of 165 percent over 2000 and 514 percent higher than 1992.
(6) The portion of health care spending for seniors devoted to prescription drugs will grow from 7.4 percent in 1992 to 10 percent in 2000 and a projected 13.3 percent in 2010.
As drug costs soar, private insurance coverage is not providing enough help. The report notes nearly half of all Medicare beneficiaries - 18.4 million people - do not have year-round prescription drug insurance coverage. For those beneficiaries who have private coverage through either employer-provided retiree coverage, private-sector supplemental (so-called "Medigap") policies, and Medicare + Choice plans, that coverage is becoming increasingly unaffordable and unreliable.
The new report was released as the debate over how to guarantee access to prescription drugs becomes more intense. The Clinton administration has proposed a Medicare prescription drug benefit, while the Republican Congressional leadership supports legislation subsidizing private insurance companies to provide drug coverage.
Data for the Families USA report were prepared by the PRIME Institute of the University of Minnesota, an independent research, education and consulting group studying economic and public policy issues related to pharmaceuticals.
