Prescription costs become harder to swallow. Providers and payers get a big dose of reality with explosive spending and patient demand for new drugs.

Hospitals and managed-care organizations know that pharmacy costs are going to keep climbing. It's a question of how much and how quickly they can slow the growth of an expense that has become increasingly hard to swallow. Spending on prescription drugs is rising at 12% per year, more than double the 5% increase in national healthcare expenditures.