Your Costs

While it may feel reassuring to ask for a medication by its brand name, remember that the more familiar you are with a brand, the more likely it is that you'll pay more for it.

Prescription Copayments
Prescriptions account for a quarter of the total cost to provide medical treatment. And prescription copayments are rising fast. In 2001, the average Priority Health prescription copayment was $9.30; in 2003 it was $13.95. That's an increase of 50 percent in just two years.

Total Drug Cost
Yet even as copayments increase, members are still responsible for only a small percentage of the total drug cost. In 2003, the average cost of a brand-name prescription was $87.44, while the average cost of a generic prescription was $14.93. What's more, brand-name drugs such as Prilosec, Prevacid, and Nexium cost approximately $120 a month, while the generic Prilosec OTC (the same chemical as Prilosec) costs approximately $30 a month.

What do total drug costs have to do with you? After all, if you're only responsible for your copayment, and someone else is paying the rest, isn't it their problem? The answer is simple, really. The overall cost of prescription drugs affects the rates insurers charge your employer. When that cost falls, the savings can be passed on to your employer - and ultimately, to you.

Increasing Costs Partly Due to General Public
While some of the rising health care costs can be linked to drug company practices, America's aging population, as well as attitudes toward prescription drugs, have also contributed.

• Demographics:
  Americans are living longer. An aging population means an increase in the number of diseases that can be treated successfully with drugs. This demographic shift results in increased consumer demand as well as the demand for new drug development.
• Increased Drug Use:
  Prescription drug use is on the rise. Over the past 20 years, pharmaceutical companies have been able to develop drugs to better treat a variety of health conditions, such as diabetes, high cholesterol, allergies, pain and depression. These drugs are expensive to develop and market. Higher demand and use result in higher costs for consumers.
• Public Perception:
  Our culture equates higher cost with better quality. However, less expensive generic drugs are just as effective as their brand-name counterparts. Patients with drug coverage only pay a small percentage of the true cost of the drugs, and they generally care about their copayment, not the overall cost. Our culture has developed a mentality that we are entitled to health care regardless of costs.

Our culture also subscribes to the idea that newer is better. But even though many new drugs are no more effective than older drugs, they usually cost more. If the consumer is shielded from the actual cost, the drug company can charge a higher price.