Americans spend more on prescription medications each year than the citizens of any other country. Several public and private organizations have recently published U.S. drug spending estimates using different methodologies. These estimates differ, but an analysis from The Pew Charitable Trusts indicates that spending on prescription drugs has increased in recent years.
The federal Centers for Medicare & Medicaid Services (CMS) estimates that total retail prescription drug spending rose 26.8 percent between 2012 and 2016 – a faster rate of growth than all other categories of personal health care expenditures. This rapid growth was largely attributable to the introduction of new specialty drugs, such as those to treat hepatitis C and various forms of cancer, according to an IQVIA report. Although the pace of rising spending slowed in 2016 and 2017, CMS projects that retail prescription spending will continue to outpace growth in other types of health care spending through 2026.
Important findings on retail prescription drug spending and the various stakeholders include:
- Net spending increased each year of the study period, from $250.7 billion in 2012 to $341.0 billion in 2016.
- Total health insurance premiums allocated to the pharmacy benefit of health plans increased from 12.8 percent in 2012 to 16.5 percent in 2016.
- Policies with capped out-of-pocket expenses and cost-sharing assistance from manufacturers helped shelter patients from rising drug costs throughout the study period.
- Net revenue for pharmacies on retail prescription drugs increased from $30.8 billion in 2012 to $76.9 billion in 2016.
- Manufacturer rebates grew from $39.7 billion in 2012 to $89.5 billion in 2016 and played a growing role in partially offsetting increases on list prices, which have risen more quickly than overall retail prescription drug spending.
- A survey of health plan and PBM personnel found that PBMs passed through 78 percent of manufacturer rebates to health plans in 2012 and 91 percent in 2016.