CHATTANOOGA, Tenn. — Despite the increasing use of generics, prescription drug costs continue to rapidly increase across the country and in the Volunteer State, according to the latest study by the BlueCross BlueShield of Tennessee Health Institute.

The study entitled Impact of Rising Prescription Drug Costs was conducted and authored by Dr. Steven Coulter, president of the Tennessee Health Institute. It looks at the current U.S. health care system and discusses changes that might work to bring the high cost of drugs down.

“Powerful examples of the high costs of prescription drugs, and why drug prices rise so much faster than the general rate of inflation are provided in the report,” Coulter said. “It also raises for discussion some actions that may serve to reduce costs.”

According to the study: • Prescription drug costs are increasing at the rate of 8 percent to 9 percent each year – roughly three times the rate of general inflation.

• In 2005, the average annual prescription cost to treat Multiple Sclerosis (MS) was $16,300. In 2010, the cost was $36,900.

• In 2011, a drug to prevent miscarriage increased from $15 per dose to $1,500 per dose under a new manufacturer.

The study also cites cost-impacting issues such as the common practice of steep price hikes on brand name drugs prior to patent expiration and off label use of an existing drug.

In conclusion, the study suggests the FDA and Centers for Medicare and Medicaid Services could help bring drug costs down by including comparative effectiveness and cost effectiveness in its decisions on approvals and coverage.

This is the second report issued by the Tennessee Health Institute, which is designed to provide decision makers a fact-based, intellectual framework for public discussions on health care policy matters.

Future research topics and presentations of the Tennessee Health Institute will focus on health care reimbursement variations, risk adjustment, and best-practice answers regarding the health status of the Tennessee.

The report is available on the new Tennessee Health Institute section on the BlueCross website.

About BlueCross

BlueCross BlueShield of Tennessee's mission is to provide its customers and communities with peace of mind through affordable solutions for health and healing, life and living. Founded in 1945, the Chattanooga-based company is focused on reinventing the health plan for its 3 million members in Tennessee and across the country. Through its integrated health management approach, BlueCross provides patient-centric products and services that drive health improvement and positively impact health care quality and value. BlueCross BlueShield of Tennessee Inc. is an independent licensee of the BlueCross BlueShield Association. For more information, visit the company's website at