Consumers Face Higher Costs As Health Plans Seek to Control Drug Spending

Publication Date: November 2001

Publisher: Center for Studying Health System Change

Author(s): Glen P. Mays; Robert E. Hurley; Joy M. Grossman

Research Area: Health

Type: Brief

Abstract:

Faced with relentless growth in pharmaceutical spending during the 1990s, health plans in recent years have tried to rein in costs by negotiating lower drug prices, encouraging more cost-conscious physician prescribing patterns and moderating the volume and mix of drugs demanded by consumers. Because of limited success with these strategies, plans have moved rapidly to three-tier benefit packages that offer broader drug choices but shift more costs to consumers. The move to three-tier pharmacy benefits appears to have slowed drug-spending growth for some plans— at least for the short term—but raises questions about the cost and quality of pharmaceutical care for consumers. Based on interviews with health plan executives in the 12 nationally representative communities the Center for Studying Health System Change (HSC) visits every two years, this Issue Brief examines plans’ strategies to contain drug spending and the possible consequences for consumers.