Costs and Benefits of Pharmaceuticals

Recent increases in drug expenditures are primarily due to the availability of more and better therapy rather than price inflation. Investment in new drugs generates savings throughout the health care system. Increased use of drugs, especially newer agents, has also resulted in increased longevity and reduced disability. Benefits from new pharmaceuticals far outweigh their costs for many key diseases of the elderly. Even incremental improvements in drug therapies contribute substantially to improved care. Chronic illness, disability, and an aging population will drive future health care spending. Pharmaceutical innovation will be an integral part of effective strategies to address this challenge. The availability of individualized therapy for the elderly will soon increase based on our rapidly growing understanding of the molecular and genetic basis of disease. This is expected to result in major advances in preventing, treating, and perhaps even curing many of the costly, life-threatening, and disabling diseases afflicting older Americans. The adequacy of drug benefit programs for elderly patients depends on the extent to which the range of drug therapies necessary for appropriate care are covered. Policies that foster the availability of unique pharmaceuticals can have important implications for treatment outcomes, quality of life, cost containment, and ongoing research investment in newer and more effective medicines. Such policies increase the diversity of agents within drug classes and thereby enable differentiated, individualized therapy. A wide range of choices is especially important for elderly patients, who have the greatest need for individualized care and are at greatest risk for compromised outcomes if choices are overly circumscribed.