Seniors' prescription drug cost inflation and cost containment: evidence from British Columbia.

We develop an analytic framework to map out the nature and relative importance of different cost-driving trends in the prescription drug market. This is used to measure prescription drug cost-drivers for the population of seniors in British Columbia during a period when they received comprehensive public drug coverage. Between 1991 and 2001, expenditures on prescription drugs for BC seniors increased from dollar 149 to 320 million. Increases in the population of seniors, and the rate at which they utilized therapies contributed under half of the total cost increase over the period. Changes in the mix of therapies and the type of product selected explained over half of the observed drug expenditure inflation. Increased generic substitution significantly reduced the price of products selected over the period.