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Drug Spending Increases More Than 2.5 Times in 8 Years

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AHRQ News and Numbers

Release date: May 16, 2007

Spending for medications prescribed in outpatient settings increased from $72 billion in 1997 to $191 billion in 2004, according to the latest News and Numbers summary from the Agency for Healthcare Research and Quality (AHRQ). The data cover spending by people who live in the community and were not in institutions such as nursing homes.

  • During the period 1997 to 2004, the average annual expenditure for prescription drugs for people age 65 and older increased 130 percent—rising from $819 in 1997 to $1,914 in 2004. The average out-of-pocket cost more than doubled for this group, increasing from $483 in 1997 to $1,027 in 2004.
  • During the years 1997 to 2004, the average annual expenditure for prescription drugs for people age 65 and older increased 130 percent—rising from $819 in 1997 to $1,914 in 2004. The average out-of-pocket cost more than doubled for this group, increasing from $483 in 1997 to $1,027 in 2004.
  • The average amount spent annually on prescription drugs for people under age 65 who purchased prescription medications rose 140 percent—climbing from $347 in 1997 to $838 in 2004. The average annual amount spent for the same period on out-of-pocket prescription drugs rose from $143 to $304.
  • From 1997 to 2004, total purchases of outpatient prescription drugs increased from approximately 2 billion to nearly 3 billion prescriptions. This increase was fueled in part by a rise in the average number of prescription drug purchases per year by those aged 65 and older. Number of prescription purchases also increased from 22 to 31 per year.
  • During the same 8-year time frame, younger consumers also bought more prescription drugs on average. In 1997, those under the age of 65 years who purchased prescription medications, purchased an average 9 prescriptions per year. In 2004, this number rose to an average of 13 prescriptions per year.

AHRQ, which is part of the U.S. Department of Health and Human Services, works to enhance the quality, safety, efficiency, and effectiveness of health care in the United States. The data in this AHRQ News and Numbers summary are taken from the Medical Expenditure Panel Survey (MEPS), a highly detailed source of information on the health services used by Americans, how frequently they use them, the cost of those services, and how they are paid.

For more information on this AHRQ News and Numbers summary, access MEPS Statistical Brief No. 168: Trends in Outpatient Prescription Drug Utilization and Expenditures: 1997 and 2004 (PDF Help).

For other information, or to speak with an AHRQ data expert, contact Bob Isquith at Bob.Isquith@ahrq.hhs.gov or call (301) 427-1539.

Current as of May 2007


 

The information on this page is archived and provided for reference purposes only.

 

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