Use of information on inflation, pharmacoeconomics, market introductio
n of new drug entities, practice-site-specific drug-use patterns, fede
ral legislation, and the changing structure of health care delivery to
project drug expenditures is discussed. Drug price inflation has been
declining over the past several years, from 6.9% in 1991 to 2.2% for
part of 1994. This can be attributed to both the growth of managed car
e and the industry's fear of government price controls. Pharmaceutical
industry analysts project the overall price increase for pharmaceutic
als in the next 12-24 months to be 2-5%. Pharmacoeconomic research is
likely to become increasingly important; pharmacists will need to unde
rstand and critically evaluate this research. Drug budget projections
should include a complete review of new drugs and biotechnology agents
pending FDA approval, drugs pending approval for new indications, and
common unlabeled uses of expensive existing agents. Various methods a
re available for tracking practice-site-specific drug-use patterns; th
ose that categorize expenditures by diagnosis-related group may undere
stimate total expenditures associated with treating a given condition.
State and federal legislation may affect drug rebates, prices, and ul
timately drug expenditures. Although health care reform legislation di
d not pass in 1994, changes are occurring in both the pharmaceutical i
ndustry and in health care delivery, shifting the control of drug sele
ction, utilization, and expenditures from individual prescribers to la
rge purchasers. The accuracy of projections of drug expenditures can b
e improved by examining inflation, pharmacoeconomic research, the intr
oduction of new drug entities, practice-site-specific drug-use pattern
s, federal legislation, and the changing structure of health care deli
very.