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The Value of Medicines: Hope for Patients, Savings for the System

We know that when it comes to the cost of medicines, it is easy to overlook the big picture. When discussing healthcare costs, medical and pharmacy spending are often considered in isolation, with no consideration of the impact that appropriate medication use can have on reducing overall costs by preventing or slowing the course of disease. That’s why we've created this new section of PhRMA.org to provide a glimpse into the latest research and data in this area.

A growing body of research establishes that proper use of medicines improves health outcomes, while lack of adherence to prescribed treatments can lead to higher spending on otherwise avoidable medical care. The evidence shows that the potential cost savings on other services from appropriate use of medicines can be significant, particularly for the growing number of Americans with chronic health conditions.

On this page, we'll highlight research on conditions such as diabetes and congestive heart failure, and we'll take a close look at literature that quantifies the medical cost savings associated with improved medication adherence, as well as the impact of changes in use of medicines associated with variations in prescription drug cost-sharing.

We hope the information presented here increases your understanding of the true value medicines have in our health care system – and in the everyday lives of people like you.

View more presentations from PhRMA.

See more: "Medicines Play a Key Role in Improving Health While Reducing Avoidable Costs."

How Medicines Help Reduce Healthcare Costs

Asthma

While an asthma-related hospitalization can exceed $7,000, the annual cost of providing asthma medications to children is $1,50010. In one study, inner-city children with asthma who received appropriate controller medications were nearly 70% less likely to visit the emergency room, saving approximately $5,000 per child per year10.

Stomach Ulcers

Antibiotics that cost about $65 per treatment11 and proton pump inhibitors that cost as little as $200 a year12 have largely replaced surgery for the treatment of ulcers. Those surgeries had typically cost about $23,500 in today’s dollars and carried risks for side effects13.

HIV

In 1985 it cost the U.S. Army an estimated $500,000 to treat each AIDS patient in its care14. New medicines have reduced the number of hospitalizations and made them shorter when they do occur15. Despite the large increases in the number of patients living with HIV/AIDS16 and the four-fold increase in the length of life, total HIV/AIDS medical costs have remained largely the same over time. In other words, for the same cost we are treating many more patients for four times as long.

Click here for sources.