America's Spending for Prescription Drugs Almost Doubled in Five Years

In 2003 2.8 billion outpatient drugs cost Americans $178 billion

November 13, 2006 – In just five years – 1999 through 2003 – consumer spending on outpatient prescription drugs nearly doubled. It rose from $94 million in 1999 to a staggering $178 billion in 2003. Part of the increase, says the Agency for Healthcare Research and Quality, was caused by Americans buying an increasing share of brand-name drugs.

The proportion of the drug bill going to brand-name drugs increased from 47.5% in 1999 to 53% in 2003. The proportion going to generic drugs "remained essentially flat," says the AHRQ report.

Only prescribed drugs obtained in an outpatient setting are included in the estimates. Insulin and diabetic supplies and equipment are included and over-the-counter medicines are excluded, as are prescription medicines administered in an inpatient setting or in a clinic or physician’s office.

The new federal analysis of drugs found:

  ● Between 1999 and 2003, purchases of brand-name drugs increased from $75.5 billion to $141 billion. Spending on generics rose from about $19 billion to approximately $37 billion during the same time period.

  ● The average amount per purchase that Americans spent each time they purchased a brand-name or generic prescription medicine also increased, with the average expenditure for a brand-name drug rising from $59.49 to $82.53 (a 39 percent increase), and for a generic medicine from $23.48 to $33.53 (a 43 percent increase).

  ● From 1999 to 2003, the number of total purchases of brand name and generic prescribed medicines by the community population increased from 1.3 billion to 1.7 billion purchases for brand name drugs and from 0.8 billion to 1.1 billion purchases for generic drugs.

The data in this AHRQ News and Numbers come from the agency’s Medical Expenditure Panel Survey (MEPS), the nation’s most complete survey of how Americans use and pay for health care, including their health insurance coverage.

AHRQ, part of the U.S. Department of Health and Human Services, works to enhance America’s health care system by developing and promoting evidence to improve quality, efficiency, effectiveness and safety. For more information, see Trends in Brand Name and Generic Prescribed Medicine Utilization and Expenditures, 1999 and 2003.