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

Mar 26, 2023

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 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 $141 billion in 2001 to $378 billion in 2021. Furthermore, the Centers for Medicare and Medicaid Services project that such spending will continue to grow, rising to $592 billion by 2031 — an increase of 57 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. Containing prescription drug costs is important to consider for improving the U.S. healthcare system and addressing the nation’s long-term fiscal challenge.

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

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Tweet: Spending on prescription drugs has increased significantly over the past few decades. https://ctt.ec/81WF9+ via @pgpfoundation

Tweet: Prescription drug costs have grown significantly over the past several decades — and that trend is projected to continue. https://ctt.ec/Mu4h1+ via @pgpfoundation

Tweet: Prices for prescription drugs have been increasing substantially over time. https://ctt.ec/533u1+ via @pgpfoundation

Tweet: High and rising prices for brand-name drugs is one of the biggest drivers of growing prescription drug spending. https://ctt.ec/S1tmL+ via @pgpfoundation

Tweet: Specialty drugs are typically much more expensive than other drugs, and increased reliance on them is one driver of rising prescription drug spending. https://ctt.ec/K04xS+ via @pgpfoundation

Tweet: The government is picking up a larger portion of the tab for prescription drugs. https://ctt.ec/b4672+ via @pgpfoundation

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