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Drug costs are a large part of total healthcare costs and represent a big factor in the healthcare cost crisis. 

Zetema PanelistZetema Panelist In Favor

Retail drug costs were 10.1% of total US health expenditures in 2015. Drugs administered in hospitals and doctors’ office were another 3-4%. That’s a modest portion of total healthcare costs. 

Zetema PanelistZetema Panelist Against

Drug costs have increased faster than general inflation, and faster than most other healthcare costs, over the past few years.

Zetema PanelistZetema Panelist In Favor

Taking a longer view, retail drug costs as a percentage of the total were 10.1% in 2009 and 10.1% in 2015 – no change. This portion fluctuates year to year: in 2010 drug costs rose only 0.1% and in 2012 the increase was just 0.2%, far below the inflation rate. Long-term trends are remarkably stable, averaging about 10% for decades.  

Zetema PanelistZetema Panelist Against

Recent trends are disturbing. Big drug cost increases in 2014 and 2015 nearly bankrupted many private insurers and state Medicaid programs. More expensive drugs, some costing over $100,000 a year, are in the pipeline.

Zetema PanelistZetema Panelist In Favor

Some remarkable and expensive new drugs were introduced in those years, representing essentially a new cure for a serious disease. Don’t we want that type of cure? In those years, drug costs will – and should – be higher. 

Zetema PanelistZetema Panelist Against

Drug costs increased 28.5% between 2009 and 2015, while general prices rose only 22.9%.1

Zetema PanelistZetema Panelist In Favor

Hospitals, which cost the system more than three times what drugs do, saw costs rise 32.9% during the same period. 

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Everyone is feeling the pinch of rising drug costs, which can be very hard on the many consumers who have high deductibles.

Zetema PanelistZetema Panelist In Favor

High deductibles also expose consumers to doctor and hospital fees, whose total costs are two time and three times as high as drugs, respectively. Most branded drugs have co-pay support programs to help privately insured patients afford the medication. 

Zetema PanelistZetema Panelist Against

Whatever the total increase in drug costs, there are widespread abuses in the ways that the companies set their prices. 

Zetema PanelistZetema Panelist In Favor

True abuses are relatively rare, but they get all the headlines. That problem is overblown, otherwise we’d see a big change in the level of total drug spending over years. 

Zetema PanelistZetema Panelist Against

What do you think?

Is the rising cost of drugs one of our biggest problems in healthcare?

Is the rising cost of drugs one of our biggest problems in healthcare?

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