As pharmacy managers, we have to remain vigilant in monitoring drug costs in our health system and take a proactive role in pursuing efficient drug utilization.

But how do you predict the future? Forecasting pharmaceutical expenditure patterns is complex. Generally speaking, four factors cause pharmaceutical expenditures to rise:
1. Price inflation
2. Utilization
3. Drug mix
4. The introduction of new, innovative medications and the resulting effects of drug mix/utilization

When you’re forecasting future pharmaceutical expenditures, you should take several issues into consideration, including the:
• Changing patterns of prescription drug utilization
• Impact of new drugs in development
• Expected patent expirations
• Changes in price of existing drugs

Several reports that study the trends in prescription drug expenditures, as well as their drivers, are released annually:
• Express Scripts. The Express Scripts cohort uses a substantial sample of Express Scripts clients, but excludes Medicaid recipients and Medicare beneficiaries enrolled in Medicare + Choice plans. The data reported for Express Scripts also excludes specialty pharmaceuticals.

• Medco Health. Medco Health data includes clients with integrated benefits (plans that include both retail and home delivery options).

• IMS Health. IMS Health data contains prescription drug sales for retail and non-retail settings.

It’s important to note that Express Scripts and Medco Health focus solely on prescription drug expenditures in the outpatient setting and observed only a managed care population.

What kind of health system-specific data and trends do you evaluate when you’re faced with developing a budget and presenting institutional drug costs to your senior management?


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