Out-of-Pocket Spending for Retail Prescribed Drugs by Age and Type of Prescription Drug Coverage, 2009 to 2018

Excerpt

Increasing use of new, expensive specialty drugs and sharp price increases for some existing drugs have led to concerns about high, and rising, out-of-pocket costs for prescription drugs. Two measures from nationally representative data, however, suggest that in recent years overall affordability of retail prescription drugs has not deteriorated, and may have improved. The National Health Expenditure Accounts show that, adjusting for inflation, aggregate out-of-pocket spending on retail prescription drugs fell by 17.5 percent from 2009 to 2016. Data from the Medical Expenditure Panel Survey show that over the same period, average per capita out-of-pocket spending, among individuals who used drugs, decreased by 27.0 percent.

Aggregate spending and per user averages may mask diverging trends at different levels of spending. In this Statistical Brief, we move beyond averages and examine trends, from 2009 to 2018, in out-of-pocket spending per user for retail prescribed drugs at the 25th, 50th, 75th, 90th, and 95th percentiles of the spending distribution. Among those who used prescription drugs, we examine the distribution of out-of-pocket spending for drugs overall, for the non-elderly (ages 0 to 64) by insurance status (privately insured, publicly insured, uninsured), and for the elderly (ages 65 and over) by type of drug coverage (private drug coverage, Medicare Part D, no drug coverage). We find that from 2009 through 2018, the overall distribution of out-of-pocket spending for retail prescription drugs shifted to lower levels at all of the points in the distribution we examined. With a few exceptions, this pattern was repeated in all of the age-insurance status subgroups we examined.

Only expenditures for drugs purchased or obtained in an outpatient setting are included in these estimates. Prescription medicines administered in an inpatient setting or in a clinic or physician’s office are not recorded in the MEPS data. Estimates of out-of-pocket spending for drugs for the years 2009 to 2017 were adjusted to 2018 dollars using the all-item Consumer Price Index. All differences discussed in the text are statistically significant at the p < 0.05 level, or better.