prescription drugs

Facts

Policy talk on prescription drugs centers around rising drug costs and what people are doing to bring those costs down – either as individuals, by buying foreign drugs on line, or in Congress, with passage of the Medicare prescription drug act and possible plans to re-import inexpensive drugs.

How much we use

Percent of population that takes at least one prescription drug per month by age (2000) NCHS -PDF:

  • Under 18 years old: 24.1%

  • 18-44 years old: 34.7%

  • 45-64 years old: 62.1%

  • 65 and older: 83.9%

  • Average prescriptions per capita in 2003 (both new and refills):

  • 10.7 (KFF)

  • Costs

    Percent of heath care costs spent on pharmaceuticals NCHS - PDF:

  • 1960: 10.1%

  • 1980: 4.9%

  • 2000: 9.3%

  • 2001: 9.9%

  • 2002: 10.5%

  • How much we spend on prescription drugs:

  • $140 billion in 2001 (KFF)

  • How much US pharmaceutical companies sell:

  • $162 billion in 2002 (CBO).

  • $216 billion in 2003 (IMSHealth).

  • Rising spending on prescription drugs - compared to health care costs and inflation

    source: HHS (pdf), BLS

    Average price of retail prescriptions (2003): $52.97 KFF

    Average out-of-pocket prescription drug costs per person (2000) by age NCHS-PDF:

    • Under 6 years old: $37

    • 6-17 years old: $70

    • 18-44 years old: $151

    • 45-64 years old: $375

    • 65 & older: $623

    What's pushing up spending

    Between 1997 and 2002 spending on prescription drugs went up for three reasons (KFF-PDF):

    • More prescriptions were dispensed: accounting for 42% of the rise in spending

    • New, upgraded - and more expensive - prescriptions were dispensed: accounting for 34% of the rise in spending

    • Manufacturer prices went up: accounting for 25% of the rise in spending

    How the drug companies are doing

    • Average percentage of pharmaceutical industry revenue that was profit in 2003 (KFF): 14.3%

    • Average percentage of all Fortune 500 companies revenue that was profit in 2003 (KFF): 4.6%

    A November, 2005 article in New York Times suggests the fortune of drug companies may be turning.

    What the pharmaceuticals' money goes towards:

     

    • Manufacturing - 27%;

    • Marketing and Administration - 35%;

    • Research and Development - 13%;

    • Taxes - 7%;

    • Profits - 18%.

    (from Health Affairs as reprinted by AMSA)

    Who's Paying?

    How prescription drugs are paid for (2002 NCHS-PDF):

    • Out-of-pocket: 29.9%

    • Private health insurance: 47.8%

    • Government: 22.3%

    Medicare and Medicaid

    For details on Medicare's recently enacted prescription drug policy check out our Medicare Prescription Drug Issue Guide.

    Medicaid prescription drug policies differ from state to state but in 2003 43 states offered some sort of prescription drug coverage. In total spending on prescription drugs accounted for 12% of all Medicaid benefits in the US (KFF-PDF).

    Compared to the rest of the world

    US drugs are 54% - 120% more expensive than those in other industrialized countries. CBO

    Americans can save an average of 24% by buying Canadian drugs (over the internet). AIM

    Where the facts are from:

    For more facts see -

    Facts pulled together by Adam Gleicher. Summer 2005.

    Did we miss something, let some slant slip in, lose a link - or do you just have something to say? Drop a line below! In the spirit of open dialogue, cJ asks you keep it civil, keep it real and keep it focused on the message, not the messenger. See our policy page for more on what that all means.

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