SUMMER 2001
Volume 6 / Number 3
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Drug Trends 2001 Glen D. Stettin, M.D., Vice President, Clinical Products, Merck-Medco Dr. Glen Stettin, Vice President of Clinical Products for Merck-Medco has provided clinical and strategic direction for Merck-Medco's formulary and utilization management programs since 1995. Stettin discussed several key factors that have driven drug trends over the past few years, and emphasized that drug cost increases are expected to continue to outpace healthcare cost increases. Key drivers of increased drug costs include: the aging population, new drugs, increases in utilization, and direct-to-consumer advertising. Stettin talked about how the change in drug mix over time is an important factor in the cost increase trend. Newer, higher priced drugs tend to replace older, lower priced drugs over time. In many cases, the newer drugs represent improvements in treating disease although this is not always true. This trend is offset in part as drugs become available generically. Generic drugs tend to be less expensive than their brand counterparts. Several drugs representing more than $25 billion in annual drug spend will expire before 2005. These drugs include Glucophage®, Pepcid®, Prozac®, Prilosec®, Zestril®, Axid®, and Claritin®. Stettin emphasized the importance of using plan design to encourage generic use, pointing out that generics are safe, effective and less expensive alternatives. He presented data showing that 9 out of 10 adults are willing to use generics if recommended by their physician, and 8 out of 10 would choose a generic if the savings were $10 or more. Unfortunately, only 5 out of 10 adults who use medicine have discussed generics with their physician. The Merck-Medico Generics FirstSM program provides physicians with generic samples and education. Increasing utilization is another key component of this trend as more people are using more drugs. In part this is due to the aging population. As would be expected, older people tend to use more drugs than younger people. Less well documented is the fact that drug cost increases are the greatest for the individuals that are the sickest. Finally, direct to consumer advertising is a factor as spending in this area is estimated to be more than $2 billion. Stettin quoted statistics provided by HCFA that estimates the rate of the drug cost increase trend will decrease slightly. Not that drug costs will decrease but that the rate by which they grow will decrease. The introduction of new generic drugs described previously is expected to be the driver of this.
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