The high cost of prescription drugs in the USA



By André Wencker
CEO, Care2Care

In august this year, a team of researchers produced a study on the annual and per-member-per-month (PMPM) spending on prescription medications for Harvard Pilgrim Health Care (HPHC), compared to the total health care spending. This study covered 6 years from 2011 through 2016, and about one million members in four New England states.

Here are the main findings:

  1. Spending on outpatient prescription medications, net of rebates by this commercial health plan, including those administered in physicians’ offices, went up to about 25% of total health care spending, largely due to increasing prices of specialty medications (total health care spending includes spending on inpatient and outpatient care, professional services, and medications)
  2. In 2016, approximately 75 percent of the plan’s pharmaceutical spending was paid under the pharmacy benefit and 25 percent under the medical benefit
  3. The overall member-level use remained stable at about one dispensing PMPM (not shown), and one specialty medication dispensing per 100 members per month. Members taking specialty medications received between three and four specialty medication dispensing per month.
  4. For members who received specialty medications, specialty medication spending accounted for 30 percent of total plan health care spending and amounted to an average of $1,092 PMPM (that is 13,104$/year), only on specialty medications.


These findings are somewhat consistent with those of two other studies published a the beginning of this year by HCCI, we referred to in a former article:

  1. Prescription drug spending growth from 2011 through 2016 was mainly induced by price increases (+23.4%), while level of use was staggering (+1.8%), resulting in a total rise in spending of +27.2%
  2. Drug spending amounted to 21% of the total spending
  3. Drug spending was concentrated on what was called “Top Spenders”, 5% of the insured population, accounting for more than 50% of the total expenditure. Among them the “Persistent Top-Spenders” (2% of the population) who spend on average $23,087 per year on prescription drugs (specialty drugs and others).

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