Abstract
It is not surprising that spending for prescription drugs is the fastest-growing component of health care in the United States. Just 12 years ago, prescription drugs accounted for 6 percent of total spending on personal health. Today, drugs account for over 9 percent of health spending, and the projections suggest that they could account for 14 percent by 2010.1 Why this rapid growth? Much has been written about the high prices charged for prescription drugs, and there is no question that the medications new to the market in the past few years are expensive. But the real story is the changing nature of medical treatment and the increasing importance of pharmaceuticals. Nearly 90 percent of all elderly people fill at least one prescription during a year. People over 65 years of age with supplemental health insurance that includes prescription-drug coverage take, on average, medications for more than four conditions per year, often using multiple drugs for each condition. Many of these prescriptions, as for younger adults, are for the newest and most expensive drugs.