Wall Street Journal Examines Employer Efforts To Control Prescription Drug Spending

The Wall Street Journal on Monday examined how some U.S. employers are "reluctant to take tougher action to rein in drug costs" despite estimates that their prescription drug spending will increase by more than 10% in 2004. According to an annual survey conducted earlier this year by New York-based pharmacy benefit manager Arxcel, more than 50% of employers predicted that their prescription drug spending would remain the same or increase by a single-digit percentage from 2003. However, Arxcel President Chris Robbins, who advises employers on prescription drug benefits, said that he expects the average employer to spend 14% more on prescription drugs in 2004 than in 2003. The survey, which involved 100 private and publicly traded companies with at least 1,000 employees, also found that 40% of respondents attribute their increased prescription drug spending to direct-to-consumer advertisements and that only 10% cited increased medication usage. Robbins said that employers "overlook" increased prescription drug use "at their own peril," adding that physicians have "lowered the thresholds for treating many conditions," moves that are "even more important than drug ads in building the ranks of patients treated and the amount of medicine they consume," the Journal reports. "People are using more drugs -- and higher doses, too," Robbins said, adding that the survey results "show an incomplete understanding of the reasons drug costs are increasing." The survey also found that 75% of respondents said employees should pay 20% or less of the cost of prescription drugs. However, Robbins recommended that employees cover 25% to 33% of the cost of medications (Hensley, Wall Street Journal, 5/10).