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Spending on Diabetes Drugs on the Rise

Study Shows Expenditures Are Going Up Due to Greater Use of Newer Drugs
WebMD Health News
Reviewed by Louise Chang, MD

Oct. 27, 2008 -- Expenditures for prescription diabetes drugs nearly doubled over a six-year period, largely due to the increased use of newer and costlier medications, a study shows.

Between 2001 and 2007, diabetes drug costs in the U.S. increased from $6.7 billion to $12.5 billion, researchers from Stanford University School of Medical and the University of Chicago report in the Oct. 27 issue of Archives of Internal Medicine.

The researchers questioned whether the newer drugs' benefits justify the increase in costs, noting that studies comparing the effectiveness of newer and older diabetes medications have not been done.

University of Chicago assistant professor of medicine and study lead author G. Caleb Alexander, MD, tells WebMD that given the increase in diabetes drug costs, such studies are badly needed.

"Newer doesn't necessarily mean better," he says. "Given that we have less experience with the newer drugs on the market and given their greater costs, I think the burden of proof is for the newer drugs to be demonstrated as worth the money."

Diabetes Drug Costs Growing

Alexander says newer diabetes drugs like the injectable medication Byetta and the novel oral drug Januvia typically sell for five to 10 times the cost of older, generic drugs.

The investigation shows that after just over a year on the market, one in 10 prescriptions written for a diabetes medication in the fourth quarter of 2007 was for Januvia, marketed by Amylin Pharmaceuticals.

Between its release in June 2005 and the fourth quarter of 2007, Merck's Byetta captured 4% of the prescription diabetes drug market.

But American Diabetes Association (ADA) Vice President of Clinical Affairs Sue Kirkman, MD, points out that drug expenditures make up only about 10% of the overall cost of treating diabetes.

In a report released last spring, the ADA estimated the total cost of diabetes in the U.S. in 2007 to be $174 billion, including $116 billion in medical expenditures and $58 billion in reduced productivity.

Kirkman agrees that it would be useful to have long-term trials designed to determine the cost-effectiveness of the new drugs vs. the old, but she says such studies are unlikely.

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