The U.S. Department of Health and Human Services said on Tuesday through a report titled “Observations on Trends in Prescription Drug Spending” that spending on prescription drugs is projected to have risen in 2015 and will likely continue to grow faster than the overall health care spending.
ASPE, a part of the Department of Health & Human Services stated in its report that $457 billion were spent on prescription drugs last year. This amount accounted 16.7% of the $2.729 trillion spent on overall personal health care services.
The report also claims that 71.9% out of that $457 billion, or $328 billion was spent on retail drugs and 28.1% or $128 billion was for non-retail drugs.
Blame it on the prices
The reports said that prescription drug spending rose 26% to $424 billion in 2014 from $356 billion in 2010, but the number of prescriptions didn’t grow as quickly. According to ASPE, the fact that total expenditures rose more quickly than the number of prescriptions suggests that prices are growing faster than quantities.
But not only prices have the blame. The report also noted that part of the spending increase stems from physicians doling out more prescriptions. Prescriptions jumped 11% to 3.9 billion in 2014 from 3.5 billion in 2010. Most of that growth come from individuals getting more prescriptions, but the increase in the overall population has something to do too.
The report also explains that there many factors responsible for the increased apart from prescription growth and rising drug prices. New drugs are approved all the time, and older meds are also losing patent protection, which makes them more vulnerable to generic competition. Between 2009 and 2013, more than $105 billion in brand medicines faced generic competition.
It seems that these factors are the responsible for the increased over the years. The agency said that from 2010 to 2014, the spending increase was 10% due to population growth, 30% due to the numbers of prescriptions per person increasing, 30% due to inflation and 30% due to price increases that were greater than inflation.
Projections for coming years
The report stated that assuming total drug spending grows at the same projected rate as the retail component, the total drug spending will reach $535 billion in 2018, or 16.8 % of all personal health care spending compared to 15.3% in 2013.
Source: Fox News