December 12, 2012
Congressional Analysts Confirm That Prescription Spending Offsets Other Medicare Costs
Washington, D.C.—The use of prescription drugs has an offsetting effect on spending for other medical services, according to a Congressional Budget Office (CBO) review of new studies. Previously, CBO had found insufficient evidence of that link when estimating the budgetary effects of legislation regarding prescription drugs.

The CBO’s revised position means it will project an offsetting effect on Medicare’s spending for medical services when estimating the budgetary impact of future legislation that directly affects the use of prescription drugs by beneficiaries.

“With those adjustments, CBO concludes that a 1% increase in prescription drug use would cause spending for medical services to fall by roughly one-fifth of 1%; likewise, a 1% decrease in prescription drug use would cause medical spending to increase by roughly one-fifth of 1%,” according to the report.

That information was included in a report released recently by CBO, Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services. The report and its confirmation of the importance of prescription drugs in lowering medical costs were applauded by the National Community Pharmacists Association.

“We commend CBO for acknowledging the growing body of evidence verifying what community pharmacists have known for some time. Namely, that the more patients have their prescriptions filled and adhere to medications their doctors prescribe, the healthier they will be and the likelihood of costlier interventions including hospitalizations diminishes—reducing health care costs,” NCPA CEO B. Douglas Hoey, RPh, MBA, said in a statement. “For years, community pharmacists have been reducing costs in the Medicare program, particularly with the launch of the Part D drug benefit. Local pharmacists can maximize the appropriate use of lower-cost generic drugs and help ensure patients understand the importance of taking their medication in accordance with doctor's orders.”

Hoey said the CBO’s new analysis is the “tip of the iceberg” when looking at how much community pharmacists can help the Medicare system save.

“CBO examined only the quantity of prescriptions filled, not the qualitative benefits of strong patient-pharmacist relationships in helping patients take their medication appropriately,” he noted. “For years, private research has documented both patients' preference for their local community pharmacy as well as the cost-savings potential of face-to-face pharmacist-patient consultations to maximize the health benefits of prescription drugs.”

U.S. Pharmacist Social Connect