Medicaid Share Declines to 10.4 Percent
PLYMOUTH MEETING, Pa., Aug. 11 /PRNewswire/ -- IMS HEALTH (NYSE: RX) today
reports that 64.5 percent of the prescriptions dispensed through U.S. retail
pharmacies receive some level of managed care coverage, up from the 1997 level
of 59.8 percent. Medicaid's share of 10.4 percent represents a continued
decline from its 11.1 percent share for 1997 and 11.6 percent share for 1996,
according to the company's Retail Method-of-Payment Report(TM). IMS HEALTH is
the world's leading provider of information solutions to the pharmaceutical
and healthcare industries.
The share of dollars follow a similar pattern with managed care plans
having paid out $51.6 billion - 63 percent - of the $81.9 billion in U.S.
retail prescription sales in 1997. Medicaid paid out $9.9 billion, or
12.1 percent, a slight decline from its 12.3 percent share in 1996.
Cash Prescriptions At Lowest Level Measured
Cash prescriptions at the retail level, those paid entirely by the
patient, were 25 percent of the total prescriptions dispensed for the second
quarter of 1998. "This share is the lowest ever measured," stated Paul Allen,
Vice President, Product Marketing, IMS HEALTH North America.
Allen noted how the current cash share reflects a 14 percent decline from
the 29.1 percent measured for 1997 and is half the 1993 share of 50 percent,
even further below the 1990 share of 63.1 percent. The ratio of cash to
third-party prescriptions reversed in 1995 when third party reached a
49.1 percent share and cash dropped to 38.2 percent.
"This pace of change is tapering off," said Allen, "as third-party plans
reach a maximum share level for the prescription drug market. A portion of
the market for the foreseeable future will continue to have full out-of-pocket
payments by the patients."
Managed Care Growth Will Continue; Cost Burden Shifting
"We will see more of the population moving into the managed care
environment," according to Myron Holubiak, general manager of The Plymouth
Group, the consulting arm of IMS HEALTH. Currently in the U.S., 43 percent of
the Medicaid population is now in managed care and in five years this figure
is expected to nearly double, reaching 83 percent. Holubiak went on to note
how even though 27 percent of the U.S. population is enrolled today in private
managed care organizations, this figure is projected to increase to 46 percent
within five years.
"While the percentage of prescriptions paid entirely by the patient
continues to decline," Holubiak commented, "the third party sector changes are
increasing patient costs." He noted how increases in consumer demand for
access to all prescription drugs have resulted in plans providing that access
with an increased co-pay. "The trend just beginning is triple tier co-pays --
a small co-pay for a generic prescription, an increased co-pay for a branded
formulary product and an even higher co-pay for a branded non-formulary
product. The result is a rising price sensitivity by consumers," continued
Holubiak.
More Than 34,000 U.S. Retail Pharmacies Tracked
IMS HEALTH tracks the retail sales of patient-anonymous data from more
than 34,000 U.S. pharmacies for its Retail Method-of-Payment Report. This
pharmacy database represents a comprehensive measurement of all dispensed
prescriptions in the retail sector, consisting of independent pharmacies,
chain stores, mass merchandisers and foodstore pharmacies that dispense
prescription drugs. For the purpose of the report, managed care is defined as
any time the pharmacist is paid directly by a non-governmental third party for
a dispensed prescription. It is a unique benchmark tool to measure the impact
of managed care on health care services.
IMS HEALTH
IMS HEALTH is the world's leading provider of information solutions to the
pharmaceutical and healthcare industries. With more than $1 billion in 1997
revenue, IMS HEALTH operates in over 90 countries. IMS HEALTH is the largest
pharmaceutical manufacturer information partner, with over 40 years'
experience in the industry. Key products and services integral to customer
day-to-day operations include: market research for prescription and
over-the-counter pharmaceutical products; sales management information to
optimize sales force productivity; technology enabled selling solutions for
sales and marketing decision-making; technologies systems and information
services that support managed care organizations.
Additional information and previous press releases are available at
IMS HEALTH's web site: http://www.imshealth.com.
SOURCE IMS HEALTH
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http://www.imshealth.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 115785
CONTACT:
Gary Friend, 610-834-5338, or Nancy Duckwitz,
610-834-5654, both of IMS HEALTH
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