Long-term drop in US out-of-pocket drug costs

A long-term fall in the proportion of out-of-pocket-covered prescription drug expenses in the USA is revealed by research published by the Kaiser Family Foundation, a private foundation providing information and analysis on health care issues.

From 1990 to 2004, the proportion of prescription drug spending by private health insurers has risen from 26% to 48%. Over the same period, out-of-pocket spending by patients fell from 56% to 25%. The shift has coincided with a slow-down in the annual rate of increase in US prescription drug spending, which rose at an average annual rate of 12% in 1995, 15% in 2000 but only 8% in 2004. Although there is a tendency to blame rising health care costs on prescription drugs, these represent only 10% of health care spending in the USA, compared with 30% for hospitals and 21% for physician and clinical services. With the rise in drugs costs falling to below that for the other two expenditure centers in 2004, the proportion of health care spending on medications is likely to fall back, the research says.

The KFF notes three factors driving changes in prescription drug spending: a rise in the number of drugs used per patient; price variations; and changes in the types of drugs used.