Policymaker Issue Briefs
No. 2
September, 2002

Is Connecticut's Drug Spending Out of Control?

Last year, Connecticut's increase in prescription drug spending was 26th among the states - right in the middle -- with an increase of 16.4%. Nationally prescription drug spending grew 17.3%.

Retail prescription sales in Connecticut averaged $614 for each Connecticut resident. Again ranking us 26th in the nation - right in the middle.

From 2000 to 2001, 32 states saw increases in average retail prescription prices higher than Connecticut's. Nationally prices rose by 9.7%, in Connecticut by 8.8%

Connecticut's Medicaid pharmacy costs have increased by approximately 15% in FY 2002 contributing to an estimated increase in Connecticut's total Medicaid spending of only 5.3% -- well below the US average of 13.4%

All estimates of rising prescription costs do not reflect savings in future years from reduced hospitalizations and consumption of other health care services.

Bottom Line: Connecticut prescription spending is increasing at a lower rate than many other states.
Rather than part of the problem, increases in pharmacy costs are part of the solution - rising drug costs are offset by improvements in health status and decreases in hospitalizations and other health care services.

Sources:
Connecticut: Prescription Drug Trends, Kaiser Family Foundation, State Health Facts Online
Comprehensive Financial Status Reports, Connecticut Department of Social Services.
The Factors Fueling Rising Healthcare Costs, April 2002, Price Waterhouse Coopers, prepared for the American Association of Health Plans
Health Care Spending During 1991-1998: A Fifty State Review, Martin, et. al. Health Affairs, July August 2002, 21:112-126.