About Wellness Corporate Solutions

Thursday, March 6, 2008

Drug Prices Up, Pressuring Benefit Budgets

AARP's bi-annual report on drug prices shows that among 200 widely used medications, wholesale drug prices increased 7.4 percent in the last two years, more than double the rate of inflation.

The sleeping drug Ambien, to cite one distinct example, was up 27.7 percent.

These rises follow the government's addition of a prescription drug benefit for Medicare beneficiaries. These increases apply to anybody paying for drugs, however, including health insurers and the companies that fund them.

"Unfortunately, many manufactures have taken [consumer acceptance of the benefit] as a green light to go ahead and raise prices even more," said John Rother, AARP's policy director. Read the group's full report on drug price increases here.

So expect continued pressure on HR budgets--and on companies to continue to find ways to reduce employee use of drugs. Consumer-driven health plans (CDHP's) are one increasingly common technique.

Of course, corporate wellness programs are a very cost effective way to control that spending too.

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