Net Health Spending To Take Hearty Upturn

A study to be released today reportedly says that a growing demand for prescription drugs will propel online spending for healthcare products and services to $9.8 billion (US$) by 2004.

According to a report by the Associated Press, online shoppers spent only $200 million on healthcare products in 1999.

The survey, conducted by Internet research firm Jupiter Communications, suggested that despite the projected increase in online buying, most consumers still find buying in traditional stores more convenient.

“Consumers say it is easier to shop offline right now,” Jupiter analyst Claudine Singer told the AP.

Ease, Price and Convenience

The survey queried 1,667 shoppers last fall. Almost half said that it is easier to shop in a traditional drug store, where they find personal attention, low prices and convenience in returning goods, the AP report said.

The study revealed that many large health insurers sign deals that restrict members to certain online drug stores. The AP cited the example of PCS Health Systems, which reportedly requires members to do their online shopping for medicine at, while Merck-Medco requires members to use

About 45 percent of online health spending in 2002, or $4.4 billion, will be for prescription drugs, the study found, indicating a rise of less than $30 million over 1999. Consumers annually spend about $175 billion on prescription drugs overall, the AP reported.

The AP said the study indicates that companies combining online and offline shopping venues will be in the best market position in the years ahead.

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