Originally created 04/03/02

Pills-by-mail orders on the rise

More and more people are buying drugs through mail-order discounters as retail prescription prices continue to soar and many patients find themselves stuck with a bigger share of the bill than ever before.

Mail-order sales of prescription drugs grew 27 percent, to $20.7 billion, in 2001, far outpacing the growth in retail drug sales for the third straight year, according to a report from the National Institute for Health Care Management. Last year, mail-order drugs accounted for nearly 12 percent of all prescription sales.

"Mail order is one of the few things that seems to be working. It's growing quite a bit faster than retail in large part because employers and health plans have found it can save money and change behavior and they are pushing it," said Larry Levitt, vice president of the Kaiser Family Foundation, a nonprofit health policy group.

To be sure, mail order isn't for everybody.

It can mean big savings for people who are uninsured, have limited drug coverage or face higher prescription co-payments at the pharmacy than through the mail.

It also can help people who take many pills daily to maintain their health.

"Mail order can work well for people who take drugs to treat chronic conditions like high cholesterol, but this isn't how people will get prescriptions when they suddenly have pneumonia," said Walter Zelman, president of the California Association of Health Plans.

That said, employers are doing everything they can to make sure workers make maximum use of the mail-order option.

By switching to tiered drug benefits with lower fees for generic drugs and for 90-day supplies of prescriptions filled by mail, employers who have seen their health bills soar see a way to reduce outlays for health benefits.

Last year, when the California Public Employees Retirement System set up a tiered drug benefit in its self-insured plans, mail-order use went up an average of 6.5 percent as reliance on retail outlets decreased by 2 percent on average.

It's a shift in behavior that has become something of a Holy Grail for health-care purchasers as inflation in pharmaceutical costs continues to be driven largely by expansive brand-name drugs that treat chronic conditions.

Blockbuster drugs to maintain health and prevent the onset of disease accounted for half the 17 percent increase in retail prescription drug spending last year.

Among the 50 drugs most responsible for soaring expenditures, sales rose 34.3 percent, while sales of all other drugs combined rose only 9.3 percent.

The top seller was Lipitor, a cholesterol-lowering brand-name drug that racked up $4.5 billion in sales and contributed more than any other medication to the one-year increase in drug spending. Lipitor, like most other top-selling drugs, also was among the most heavily advertised to consumers in 2001.

Health plans walk a fine line between promoting mail-order options and ensuring that members fill enough prescriptions at retail outlets to warrant price breaks based on sales volume, said Glenda Owens, spokeswoman for Prescription Solutions, a subsidiary of Pacificare of California.

"Most employers and patients want to have the benefits of both retail and mail-order. We hope that consumers would look at mail order as an affordable option, but I don't think you can eliminate retail," Owens said.

While more people might benefit from buying Lipitor and other maintenance drugs through the mail, health plans have had only mixed success getting the word out about discounts, said the Kaiser Foundation's Levitt.

That's because most people get their information on drug prices by going to the drugstore.


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