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Abstract

From 1993 to 2003, spending on medications was a major factor in unprecedented growth in mental health spending. An analysis of current trends shows that past high growth in spending on psychiatric drugs has slowed substantially—from an average annual growth rate of nearly 19% in 1997–2001 to 6% in 2001–2008. The increased entry of generic medications, which constituted 70% of all psychiatric prescriptions by 2008, was a key contributor to the slowdown in spending.

Abstract

Objective:

This study analyzed recent trends in spending on psychiatric prescription drugs and underlying factors that served as drivers of these changes.

Methods:

Data were collected from the MarketScan Commercial Claims and Encounters Database (1997–2008), Substance Abuse and Mental Health Services Administration spending estimates (1986–2005), and the Medical Expenditure Panel Survey (1997–2007). The trends in medication spending derived from the data were decomposed into three categories: percentage of enrollees who used psychiatric medications, days supplied per user, and cost per day supplied.

Results:

The average annual rate of growth in expenditures per enrollee slowed from 18.5% in 1997–2001 to 6.3% in 2001–2008. A decline in the growth rate of cost per day supplied, from 8% to 2%, accounted for 49% of the overall decline in spending growth, and a decline in the growth of the percentage of enrollees who used medication, from 7% to 2%, contributed 41% to the overall decline. There was a smaller change in days supplied per user, from 3% to 2%, that contributed 10% to the overall decline. The increased entry of generic medications, which constituted 70% of all psychiatric prescriptions by 2008, particularly generic antidepressants, was a key contributor to the slower growth in costs.

Conclusions:

Past high growth in psychiatric drug spending arising from growth in utilization of branded medications has declined significantly, which may have implications for access and new product investment. (Psychiatric Services 63:13–18, 2012)

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Figures and Tables

Figure 1 Rate of growth in average annual spending for all medications and psychiatric medications, 1987–2005
Figure 2 Rate of growth in average annual spending for all psychiatric drugs, 1998–2008
Figure 3 Use of any psychiatric medication and antidepressants, 1997–2007
Table 1 Rate of growth in spending for psychiatric medications, 1997–2008

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Published In

Go to Psychiatric Services
Go to Psychiatric Services
Cover: Mount Vesuvius, by Andy Warhol, 1985. Museo Nazionale di Capodimonte, Naples, Italy. © The Andy Warhol Foundation for the Visual Arts, Inc/Artists Rights Society, New York.
Psychiatric Services
Pages: 13 - 18
PubMed: 22227754

History

Published online: 1 January 2012
Published in print: January 2012

Authors

Details

Tami L. Mark, Ph.D., M.B.A. [email protected]
Dr. Mark and Ms. Levit are affiliated with and Dr. Kassed was formerly with Thomson Reuters, 4301 Connecticut Ave., N.W., Washington, D.C. 20008 (e-mail: [email protected]).
Cheryl Kassed, Ph.D.
Dr. Kassed is currently with Health Analytics in Columbia, Maryland, and Ms. Vandivort-Warren is with the Substance Abuse and Mental Health Services Administration, Rockville, Maryland.
Katharine Levit, B.A. [email protected]
Dr. Mark and Ms. Levit are affiliated with and Dr. Kassed was formerly with Thomson Reuters, 4301 Connecticut Ave., N.W., Washington, D.C. 20008 (e-mail: [email protected]).
Rita Vandivort-Warren, M.S.W.
Dr. Kassed is currently with Health Analytics in Columbia, Maryland, and Ms. Vandivort-Warren is with the Substance Abuse and Mental Health Services Administration, Rockville, Maryland.

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