Friday, January 16, 2015

The Rise of Prescription Drugs

Prescription drugs are a large and growing share of health care spending. That explains why the castle-like edifices of Walgreens, CVS, Rite-Aid, and other pharmacy chains now loom over so many street corners and shopping centers. In 2012, the total amount spent (by insurance companies, government programs, and out-of-pocket payments) on the health care received by Americans amounted to $1.351 trillion. Prescription drugs accounted for more than one-fifth of that amount in 2012, nearly double the share in 1996....

Percent of total health care spending devoted to prescription drugs in 2012 (and 1996)
For people under age 65: 21.9% (11.5%)
For people aged 65-plus: 21.3% (12.7%)

Source: Medical Expenditure Panel Survey, Trends in National Health Care Expenses in the U.S. Civilian Noninstitutionalized Population, Percentage by Type of Service and Source of Payment with Age and Insurance Groups, 1996-2012

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