Prescription drug spending: Contribution to health care spending and cost containment strategies

Prescription drug costs have been the focus of much research in the health care economy, within managed care organizations, and hospital systems. Pharmacy costs are drivers of general health care spending, premium increases, and to a lesser extent, hospital spending. Factors contributing to increased prescription spending include increased prescription use, replacement of older, cheaper drugs with new and more expensive ones, and the costly prices of retail prescription drugs. In this article, we review the cost of prescription drugs as they relate to general health care costs and the costs associated with operating a hospital organization. We also address what is currently being done to control the cost of prescription drugs in the hospital setting.