Employers Pass On Rising Cost Of Prescription Drugs To Workers

As prescription drug prices and usage continue to escalate, employers are passing a growing proportion of the cost of drug insurance coverage on to workers, according to a study based on data compiled by the Bureau of Labor Statistics (BLS).

The number of employers charging more than $10 for a prescription drug co-payment has risen from 10% in 1993, to more than 70% in 2003, according to the BLS. Over the same time span, the percentage of companies offering prepaid plans with co-payments under $10 fell from 80% to less than 10% a decade later.

The BLS reported that U.S. aggregate spending for prescription drugs has more than tripled, due largely to a combination of rising prices and an increase in the use of prescription drugs. The average price of a prescription jumped from $22.06 in 1990 to $45.79 in 2000. But BLS researchers noted that growing consumption was responsible for the bulk of the increase in spending. The number of prescriptions filled by Americans between 1992 and 2002 grew 74%, from 1.9 billion to 3.3 billion.

In an effort to contain expenditures on pharmaceuticals, employers have started offering employees incentives to choose lower cost prescription drug options. Many companies now offer higher reimbursements for pharmaceuticals, network pharmacies, and mail order services. The BLS found that, in 1993, fewer than 30% of companies offered higher reimbursement for generics, compared with more than 80% in 2003.