What’s driving your pharmacy costs?


Increased demand for prescription drugs, expensive specialty medicines, price inflation and widespread chronic illness are causing a greater strain on health plan and patient pharmacy resources. To more effectively manage these costs, plans need to understand the drivers of their trend, identify actionable data and consider a multi-pronged approach to control spend while deriving value.

Trends driving the spiral

In recent years, drug demand and drug costs have been on an upward spiral. Specialty drugs are part of what drives this trend, accounting for up to one-third of total drug costs — though they make up only about 1 percent of prescription volume.1

Chronic diseases also play a role in the upward trend. More than 40 percent of the U.S. population is affected by chronic disease, and more than 75 percent of all health care costs are due to chronic conditions.2


And yet inflation is the number-one driver for pharmacy spending, with employers’ pharmacy costs rising about twice as fast as other medical costs and well above the rate of inflation for the rest of the U.S. economy.3

Responding in real time

Getting a handle on spiraling costs requires real-time trend tracking, allowing health plans to deploy better strategies to manage pharmacy costs and drive greater value. Data that measure price, utilization, mix of generic versus brand-name drugs and other factors from one period to the next allow plans to respond to challenges in real time.

For more insight into strategies for managing pharmacy costs, download our latest issue of OnTrend — “Spiraling Pharmaceutical Costs.”




  • Loftus P. Employers battle drug costs. Wall Street Journal. Dec. 18, 2015.
  • National Health Council. About chronic diseases. July 29, 2014.
  • Loftus.





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