OREANDA-NEWS. This A.M.BestTV episode explores how prescription drug costs are rising, fueled by new and generic drugs and by increased usage, at the same time that medical costs are trending down. 

A.M. Best analysts Sally Rosen, vice president, and David Mitchell, senior financial analyst, highlighted those facts and others in a recent Best Special Report, titled, “No End in Sight for Escalating Prescription Drug Pricing Trend.” 

“There is a dichotomy going on, with medical cost trends going down and prescription cost trends going up by double-digits,” said Mitchell. “The factors involved in this are new and very expensive drugs coming into the market, higher use of prescription drugs, as well as a noticeable increase in the use of generic drugs.”

Rosen and Mitchell discussed how the cost of bringing a new drug to market has increased tremendously, and said that the cost today can be as high as $5 billion, compared with $5-6 million 40 years ago.

“The pharmaceutical companies are trying to recapture some development costs in pricing the prescription cost when the drug goes to market,” explained Rosen.