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8.2% rise in drug costs is (don't gag) a good thing

Date Posted: October 27 2006

In an era of seemingly never-ending health care cost increases, there's some good news from an annual survey of prescription drug prices.

But don't get the impression that your medicine is going to get cheaper or even level off - the news isn't that good.

A new survey said for the first time in several years, drug costs are expected to rise in 2007 at about the same rate as other health care costs, about 8.2 percent. In the recent past drug costs have been rising about twice as fast as other health care costs.

"The new data is encouraging," said Laborers Health and Safety Fund of North America Co-Chairman Armand E. Sabitoni, referring to the 2007 Segal Health Plan Cost Trend Survey. He said health care costs "are still rising, but the rate of increase has declined, especially in the area of prescription drug costs."

The U.S. inflation rate is at about 4.1 percent, which, coincidentally, is roughly equal to the increase in real average weekly earnings in the U.S. The numbers mean workers are treading water when it comes to keeping up with inflation, and the high drug and other health care costs aren't helping.

The Laborers Health and Safety Fund said much of the improvement in the drug cost trend can be traced to the increased use of generic medicine, both at retail outlets and through mail order purchases. In part, they said this is due to the availability of more medicines in generic form and it also results from successful efforts by health plans to encourage doctors and patients to use generics.

"The battle to reduce all health care costs," says Sabitoni, "remains critical to our nation, our union, our signatory employers and our members. The fact that total health costs continue to rise faster than average earnings is evidence that the health care market now compels workers to forego wage increases in order to sustain their health care."

The Laborers say members can lower health care costs by leading a healthy lifestyle, becoming more conscientious heath-care consumers, working safely, and avoiding unnecessary trips to the emergency room. Nationally, their health care program is promoting wellness, joining health care coalitions and weeding out expensive health care providers.

"Soaring health care costs are a national catastrophe," says Sabitoni, "but until political solutions are found, we have to rely on ourselves and our own organizations."