Content by Keyword: Drugs, Medical Devices, and Pharmacy Services

Not all drugs dispensed by pharmacies are purchased from wholesalers. Institutions that operate their own outpatient pharmacies, such as hospitals and clinics, may deal directly with manufacturers, either individually or through buying groups. They typically save the wholesaler markup. In addition, they may receive a price lower than that offered

The simple pricing model just described applies to cash transactions but not to those in which the retail pharmacy is paid by a group insurer, employer, or other third party at the point of sale. This section will describe mechanisms affecting the prices paid by private third parties that manage drug benefits. Again, because management by a PBM is

Cash customers at retail pharmacies include people without coverage and people with indemnity coverage who pay for their own prescriptions and are later reimbursed by their insurer. 4 Prices are set by a series of transactions linking the manufacturer to the cash customer through the wholesaler and the retail pharmacy, as shown in Table 3-1. S

Most noninstitutionalized people, regardless of their coverage status, obtain prescription drugs through some form of retail pharmacy, including independent pharmacies, chains, pharmacies in supermarkets or mass merchandisers, and mail-order pharmacies. In 1998, sales through retail outlets accounted for 90 percent of total outpatient prescription

One of the charges of this study was to examine the differences in drug prices paid by people with and without prescription drug coverage. Prices and price differentials are important measures for understanding the market for pharmaceuticals in the United States. Analyses of pharmaceutical pricing, however, are complicated by the intricacies of th

1 - This and subsequent MEPS-based tables on the non-Medicare population are limited to nonelderly people without Medicare. They omit the very small number of elderly people—an estimated 150,000—who are not covered by Medicare. 2 - Appendix B contains a further discussion of use rates and how users are treated in this report. 3 - The diffe

The very rapid growth in drug spending in recent years has been attributed to a variety of factors:

Table 2-31 shows MCBS data on changes in drug utilization and spending for Medicare beneficiaries between 1992 (the first year of MCBS) and 1996, results that are generally consistent with the National Health Expenditures estimates for the total population. Total per beneficiary drug spending (including both third-party and out-of-pocket spending)

The nation’s spending for prescription drugs has grown dramatically in recent years. Table 2-29 shows estimated total national health expenditures and prescription drug expenditures for selected years from 1965 through 1998, along with HCFA(now known as CMS)’s projections to 2008. All numbers are in nominal dollars and thus reflect general inf

Prescription drug spending and utilization have become increasingly important issues in part because of their rapid growth. Spending on prescription drugs has risen faster than spending on other types of health care throughout the 1990’s. This section explores growth in spending for the total population and for Medicare beneficiaries. It will al

Another consequence of not having drug coverage may be the use of a different mix of drugs. In addition to not filling some prescriptions, some people without drug coverage may obtain different prescriptions compared to the prescriptions that people with drug coverage get. Preliminary analysis of MCBS data on Medicare beneficiary utilization of me

Because out-of-pocket spending for prescription drugs can take up a significant share of spending, some people may not be able to buy all of the medications they need. Data from the 1997 National Health Interview Survey confirm that, both among Medicare beneficiaries and in the total population, people without coverage are going without medication

Spending for drugs is a substantial component of total out-of-pocket health spending for all ages and income levels. The following tables and charts were prepared using the Consumer Expenditure Survey (CEX) data prepared by the Bureau of Labor Statistics. This analysis differs in several respects from others reported in this chapter. Expenditures

This report has shown that, while people without drug coverage have lower total drug spending than those with coverage, they incur higher out-of-pocket costs. Tables 2-20 through 2-23 show this out-of-pocket spending as a share of income for covered and noncovered Medicare beneficiaries, in the total population and in the 20% with the highest spen

There are several ways to explore the burden that drug spending places on Medicare beneficiaries without coverage as compared to those who do have coverage: drug spending as a proportion of income, drug spending as a proportion of other spending, self-reported problems in affording drugs, and self-reported differences in the mix of drugs used. The

The RAND Health Insurance Experiment of the late 1970’s and early 1980’s found that even in the absence of adverse selection, insurance can lead to higher rates of use. 18 In the experiment, higher cost-sharing deterred people from obtaining both necessary and unnecessary care. 19 Several studies focusing on drug use by Medicare beneficiarie

People without Medicare may decide whether or not to obtain health insurance, and anticipated need is certainly a factor in this choice. However, most non-Medicare individuals do not make a separate decision about whether to obtain coverage specifically for prescription drugs. The vast majority who have insurance are covered through employer plans

There are a number of reasons why people with prescription drug coverage might have higher utilization and spending than people without coverage:

Table 2-14 and Figure 2-10 show the distribution of spending by beneficiaries with and without drug coverage in 1996. Only 4 percent of Medicare beneficiaries accounted for almost a quarter of all beneficiaries’ drug spending in 1996, and the top third of beneficiaries spent three-fourths of the total spent on drugs. The distribution of spending

Table 2-13 shows spending by covered and noncovered beneficiaries by race. Among Medicare beneficiaries, average spending by people with coverage is slightly higher for whites than for blacks or people of other races, but the difference in spending for the covered and the noncovered is slightly greater for nonwhites. However, these differences are