PhRMA Responds to New Study

Published November 1, 2001

The Center for Studying Health System Change study found that, while hospital care fueled the largest portion of last year’s spending on health, total spending on prescription medicines also increased.

We believe pharmaceutical expenditures are increasing because innovative medicines save lives, improve the quality of life, keep people out of the hospital, and get them back to work—and to their families—sooner. Simply put, there is no comparison between what patients and doctors achieve with today’s medicines as compared to yesterday’s.

Important research published . . . in the journal Health Affairs documented the value of innovative medicines to patients and the health care system. This study, by Columbia University economist Frank R. Lichtenberg, Ph.D., found that people who take newer prescription drugs were less likely to die or lose work time, spent fewer days in the hospital, and spent less on other health care services.

According to Lichtenberg, the cost of newer drugs was offset by an estimated three-fold reduction in non-drug health care spending. It’s also important to remember that outpatient prescription medicines, despite their ability to improve lives and reduce other health care spending, account for only 8 cents out of every health care dollar.

Alan F. Holmer is president of PhRMA. He issued this statement in response to a new study by the Center for Studying Health System Change.