Rx Drugs And the US Health Care System

For 1996, total national health expenditures in the USA are projected to reach $1,100 billion, or equal to 14.5% of Gross Domestic Product. The share of GDP allocated to health care in the USA has more than doubled since 1970, when it was just 7.4%. Between 1996 and 2005, growth in NHE is expected to stabilize at about 8% per annum, according to the Pharmaceutical Research & Manufacturers of America, and beyond 2010, the aging of the population will have a significant impact on health care spending.

While the USA devotes a higher percentage of GDP to health expenditures than all other major industrialized nations, by contrast, the share of GDP devoted to pharmaceuticals in the USA is about average for an industrialized country, standing at 5.5% in 1995 and forecast at 5.6% for 1996, compared with 8.9% in 1965.

Consumer spending on prescription medicines compared with other consumer spending is relatively small. The PhRMA points to Department of Commerce figures which show per capita spending per day of $0.57 for medicines in 1995. This compares with $6.86 a day on housing, $2.65 a day on clothing and $1.19 a day on gasoline and oil.