Abstract
This paper analyzes the factors accounting for the high increases in prescription drug spending for mental health and substance abuse (MHSA) disorders during the late 1990s in Medicaid and privately insured populations. Trends in drug spending growth between 1996 and 2000 were decomposed to distinguish the contributions of users per enrollee, prescriptions per user, and cost per prescription. Drug spending increased approximately 30 percent per year for both Medicaid and privately insured populations, but the contributions of various spending components and drug classes differed considerably. In the public sector, 75% of MHSA drug spending growth was due to an increase in the cost of a prescription; with atypical antipsychotics contributing most to spending growth. In the private sector, spending growth was more evenly divided between increased prescription costs and greater utilization, with newer antidepressants contributing the most to spending growth. We conclude that during a period of rapid MHSA drug spending growth, more costly prescriptions and more prescription users were the primary contributors. While such drug spending growth has diminished in recent years, many of the factors that led to it remain, and industry projections have forecast increased drug spending growth in the next several years. As more medications are made available into the future, the management of new medications will continue to be critical. © 2007 by The Haworth Press.