Medco Study Reveals Pediatric Spending Spike On Drugs To Treat Behavioral Problems

ORLANDO, Fla., May 17 /PRNewswire-FirstCall/ -- Spending on drugs primarily used to treat attention deficit hyperactivity disorder (ADHD) surged 369 percent for children under age 5 as the number of kids taking one or more prescription medicines to treat behavior-related conditions hit nearly 9 percent for those children taking as least one medication overall, according to new data released today at the Medco Health Solutions, Inc. 2004 Drug Trend Symposium.

"This analysis provides a striking commentary on the state of pediatric treatment in this country, as well as the costs shouldered by parents whose children live with these conditions," said Dr. Robert Epstein, chief medical officer, Medco . "It goes without saying that early detection and appropriate treatment of these conditions is extremely important, but the emphasis is on 'appropriate' with an eye on cost-effective therapy, as well."

The research reviewed the prescription data of 300,000 children ages 19 and younger in four major categories of behavioral medications used to treat a variety of conditions including ADHD, depression, autism and conduct disorders. Although recent studies have found an increase in the use of antidepressants, the Medco research found an even greater growth in the utilization of medications used to treat other behavioral conditions.

  Among the major findings of the analysis:
  -- Prescription drug spending for behavioral conditions rose 77 percent
     between 2000 and 2003 due to both increased costs and increased use of
     these medications.

  -- In 2003, spending on behavioral medications to treat children overtook
     both the antibiotic and asthma categories, which are traditionally
     high-use categories in pediatric medicine.

  -- The number of children on behavioral medications has jumped more than
     20 percent between 2000 and 2003, outpaced only by the increase of
     children on drugs to treat gastrointestinal conditions, which increased
     by nearly 28 percent.

  -- Among the largest increases were medications primarily used to treat
     attention deficit/hyperactivity disorder (ADHD) -- where spending
     increased by 183 percent for children overall, and by 369 percent
     increase for children under age 5.  Utilization in preschoolers was up
     49 percent from 2000 to 2003.

  -- Spending on antidepressants for children grew 25 percent, while use of
     these drugs rose 27 percent between 2000 and 2003.  A review of 2004
     data shows that of the children on at least one prescription medication
     in the first quarter of this year, the number of children using
     antidepressants increased by 15 percent over the first three months of
     2003.

  -- The number of children on medications to treat severe behavioral
     conditions related to autism and conduct disorders increased by more
     than 60 percent from 2000 to 2003, while spending on these drugs rose
     142 percent in the pediatric group.  Among children ages 5 through 9,
     utilization was up 85 percent, while spending in this category grew 174
     percent.

  -- Although children continue to predominantly use antibiotics, allergy
     and asthma drugs, the rate of increase in utilization and cost for
     these categories has been more moderate over the past four years than
     for behavioral medications;  antibiotics showed no change in
     utilization and a 24 percent increase in spending; the use of allergy
     treatments increased 3 percent, while spending decreased by 7 percent;
     and asthma medications showed a 12 percent increase in utilization and
     a 24 percent rise in costs.

  Pediatric Drug Trend - A Window into Future Costs

Medco's annual Drug Trend Report examines the drug spending experience representative of its more than 60 million members to help identify factors that contribute to the rising costs of prescription drug care. The total number of dollars vested in prescription medications for patients under age 19 remains a relatively modest percentage compared to other age groups, however the rate of increase in spending was significant -- an indicator of future trends.

Surprisingly, the average unit cost per child per day is more than 60 percent higher than that of seniors. Although children take fewer medications than seniors, medications used by children have the highest average cost -- $2.12 per day for children versus $1.29 per day for seniors.

"The unit costs of medications for children outweigh that of all other age groups, so we have made it a priority to help our clients understand the factors that drive pediatric drug trend, and offer solutions to those challenges," said Epstein. "Through education and encouraging appropriate medication use, plans can help curb the explosive trend in the pediatric population."

Medco's analysis uncovered additional drug trend drivers in the pediatric market:

  -- Biotech/specialty medications spending highest among pediatrics:  Only
     a very small proportion of children are prescribed specialty
     medications, although there has been significant growth in this area.
     Select biotechnology drugs contribute a larger portion of overall drug
     spending among children than any other age group.  Among children,
     spending growth from 2000 to 2003 was greatest for select biotechnology
     medications (127 percent) and rheumatological therapies (44 percent)
     within the specialty area.  Additionally, one of the key cost drivers
     in the asthma category was Xolair, a new biotech medication to treat
     asthma in children 12 years and older.

  -- Diabetes treatment rising more slowly:  Spending on diabetes therapies
     increased by only 7 percent, a significantly lower annual rate of
     increase than 2002 (20 percent) and 2001 (23 percent).  Diabetes
     therapy utilization fell 3 percent in 2003, following three consecutive
     years of growth potentially reflecting a move toward lifestyle changes
     such as diet and exercise as first a line course of therapy.

  -- Gastrointestinal medications continue growth among infants:  Spending
     on ulcer and acid-reflux medications for children younger than five
     years old rose 26 percent last year.  The class continues to be one of
     the fastest growing segments of drugs among the pediatric age group
     perhaps related to the new treatment indications for these medications
     in children age 2 and older.

  2004 Drug Trend Symposium - Navigating the New Health Economy

The Medco 2004 Drug Trend Report, released at the company's Drug Trend Symposium, provides a comprehensive examination of the various factors that influenced prescription drug spending in 2003, and a forward-looking view into the trends that could shape prescription healthcare in the next three years. The Report discusses independent and proprietary research, data and analysis, legislative and regulatory change, advances in technology and new approaches to the management of prescription healthcare services. More information about Medco's Drug Trend Report and Symposium is available at: http://www.drugtrend.com/

About Medco

Medco Health Solutions, Inc., a leading pharmacy benefit manager with the nation's largest mail order pharmacy operations, assists its customers to moderate the cost and enhance the quality of prescription drug benefits provided to members nationwide. Its customers include private- and public- sector employers and healthcare organizations. Medco is traded on the New York Stock Exchange under the symbol MHS. On the Net: http://www.medco.com/.

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties which may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this presentation should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Medco Health Solutions, Inc.

CONTACT: Ann Smith of Medco Health Solutions, Inc., +1-201-452-0487,ann_smith@medco.com; Kevin Lamb or Janet Schiller, both of Coyne PublicRelations, +1-973-316-1665, for Medco Health Solutions, Inc.