Transcript Retail Prescription Drug Spending In The National Health Accounts

Retail Prescription Drug
Spending In The National Health
Accounts
Health Affairs, Vol 23, Issue 1, 160-167
Copyright © 2004 by Project HOPE
http://content.healthaffairs.org/cgi/content/full/23/1/160#T1
Trends in Rx Spending
EXHIBIT 1 U.S. Spending For Retail Prescription Drugs, Selected Years 1960–2002
Spending
Prescription drugs (billions)
Out-of-pocket
Third-party
% Out of Pocket
1960
1980
1982
1992
1994
1999
2000
2002
2.7
2.6
0.1
12.0
8.4
3.7
15.0
10.0
5.0
48.2
26.4
21.8
54.6
26.3
28.3
104.4
34.4
70.1
121.5
38.3
83.2
162.4
48.6
113.8
96.3
70.0
66.7
54.8
48.2
33.0
31.5
29.9
10.00
0.51
4.90
0.43
4.70
0.46
5.80
0.76
5.80
0.77
8.50
1.13
9.30
1.24
10.50
1.55
Retail drug spending
% of health spending
% of GDP
Retail Drug Spending Growth
• Recent rapid spending growth for retail drugs has largely
arisen from increased use of new drugs, rather than from
increasing prices of existing drugs.
• A sizable shift in the payment from consumers to third
parties has also contributed to faster growth. Strategies
such as negotiating for rebates and using tiered
copayments have sought to slow spending growth but
simultaneously have complicated the estimation of
spending in the National Health Accounts (NHA).
• NHA estimates show that retail pharmaceuticals’ share of
health spending is not much different than it was in 1960,
although its share of gross domestic product (GDP) has
tripled.
Factors Leading to Growth
Rx as Share of Health Spending