Feb 8, 2012
Published In: Health Affairs, v. 31, no. 2, Feb. 2012, p. 408-416
Posted on RAND.org on February 01, 2012
This article was published outside of RAND. The full text of the article can be found at the link above.
Prescription drug spending and pharmacy benefit design have changed greatly over the past decade. However, little is known about the financial impact these changes have had on consumers. We examined ten years of nationally representative data from the Medical Expenditure Panel Survey and describe trends in two measures of financial burden for prescription drugs: out-of-pocket drug costs as a function of family income and the proportion of all out-of-pocket health care expenses accounted for by drugs. We found that although the percentage of people with high financial burden for prescription drugs increased from 1999 to 2003, it decreased from 2003 to 2007, with a slight increase in 2008. The decline is evidence of the success of strategies to lower drug costs for consumers, including the increased use of generic drugs. However, the financial burden is still high among some groups, notably those with public insurance and those with low incomes. For example, one in four nonelderly people devote more than half of their total out-of-pocket health care spending to prescription drugs. These trends suggest that the affordability of prescription drugs under the future insurance exchanges will need to be monitored, as will efforts by states to increase prescription drug copayments under Medicaid or otherwise restrict drug use to reduce public spending.