Spending on Prescription Drugs Has Been Growing Exponentially over the Past Few Decades

Jun 16, 2022

Prescription drugs play a vital role in the U.S. healthcare system, enabling Americans to live longer, higher-quality lives. However, the growing cost of those drugs presents a significant challenge to the quality and affordability of healthcare in the United States.

U.S. spending on prescription drugs has risen substantially in the past 20 years, climbing from $122 billion in 2000 to $348 billion in 2020. Furthermore, the Centers for Medicare and Medicaid Services project that such spending will continue to grow, rising to $567 billion by 2030 — an increase of 63 percent.

That growth in spending can be attributed to many factors, including the number and type of drugs prescribed. Some common reasons include:

High and rising prices for brand-name drugs;
a lack of competition due to the U.S patent system;
the use and cost of specialty drugs; and
a lack of transparency in drug prices.

While prescription drugs can help improve health outcomes in the United States, the rising cost of those drugs can place a financial strain on American families and the country’s fiscal health. Moving forward, containing prescription drug costs will be a vital issue as our country continues to recovers from the pandemic and turns its attention toward addressing the long-term fiscal challenge.