Last year, the US Department of Defense spent more on prescription medicines than it did on Black Hawk helicopters, Abrams tanks, Hercules C-130 cargo planes and Patriot missiles combined, according to a new study.
Spending by the Pentagon on prescription drugs increased more than 123% during 2002-2011, from $3 billion to $6.8 billion, which was nearly double the rate of rise for the US pharmaceutical market overall. And while sales to the military represent only around 2% of total US prescription drug revenues, for many drugmakers such sales outpaced their overall market growth during the period, according to the research, which has been conducted by the Austin American-Statesman newspaper.
The report also notes warnings from some experts that if this fast growth is not addressed soon, it could present a threat to national security, as the drugs bill - and particularly spending on high-cost specialty medicines - swallows up money needed for training and weapons systems.
The growth in military drug spending over the decade is less a reflection of the need to treat wounded troops than the rise in ageing retirees enrolled in the military's Tricare health programme, according to the American-Statesman. Since 2002, the Pentagon has spent more than $5 billion on blockbusters including Pfizer's Lipitor (atorvastatin), Sanofi/Bristol-Myers Squibb's Plavix (clopidogrel), GlaxoSmithKline's Advair (salmeterol/fluticasone), AstraZeneca's Nexium (esomeprazole) and Merck & Co's Singulair (montelukast), it finds.However, the military also spent at least $2.7 billion on antidepressants and more than $1.6 billion on opioid painkillers for use by active personnel during the period.
In fact, prescriptions for active service personnel account for only around 10% of those provided through Tricare, says the Statesman’s research, which analysed nearly every drug purchase made during the decade through two Defense Department agencies. These are the Defense Logistics Agency, the central purchaser for the military, which buys medicines from wholesalers, and the Tricare Management Activity, which deals with prescription drugs bought at retail pharmacies and through mail order. However, the study did not include mail-order drugs, which account for about 15% of the Pentagon's total prescription drug bill.
The fast growth in spending began in 2001, when the Tricare for Life benefit was introduced for retirees aged over 65 with at least 20 years' service. This allowed them to fill their prescriptions at retail pharmacies, which costs the government considerably more than supplying drugs through mail order or in military hospitals, and by 2004 Tricare's pharmacy costs had more than doubled. Nevertheless, legislators continued to provide ever-wider military pharmacy benefits, and by 2008 it was estimated that, as a result, defence health costs had increased 42% since 2001.
The value for drugmakers of getting a product onto the Defense Department's formulary is enormous, giving it credibility in the view of civilian hospitals and emergency rooms, while doctors who prescribe it while serving in the military may well continue to do so when they return to civilian practice, the report comments.It also points out that the Pentagon has introduced a number of initiatives aimed at curbing its runaway pharmacy spending, with attempts to persuade both serving personnel and retirees to fill their prescriptions through cheaper mail-order rather than retail pharmacies, overhauling its formulary and increasing co-payments on expensive drugs. However, Congress largely rejected a new range of such measures which were proposed by the White House when legislators passed the $633 billion National Defense Authorization Act for fiscal 2013 in December; President Barack Obama signed the Act into law on January 2.