The financial burden from prescription drugs has declined for the nonelderly, but remains a problem for some groups

Research Activities, September 2012, No. 385

Although the cost burden of prescription drugs for nonelderly adults grew substantially from 1999 through 2003, by 2008 the cost burden had fallen back to 1999 levels, according to a new study. This decline demonstrates the success of strategies to lower drug costs for consumers, including increased use of generic drugs, note the researchers. However, they found that the financial burden of prescription drugs is still high among some groups, notably those with public insurance and those with low incomes. Prescription drug burden is calculated in two ways: (1) as out-of-pocket drug costs compared to family income and (2) as the proportion of all out-of-pocket health care expenses accounted for by prescription drugs.

The researchers found that in 1999, 7.1 million people (2.9 percent of the United States population) lived in families that spent more than 10 percent of their family income on prescription drugs. That same year 64.5 million people (26.7 percent of the population) lived in families in which prescription drugs accounted for more than half of all out-of-pocket health care spending. These numbers had risen in 2003 to 10.8 million people (4.3 percent) who had high drug-cost burden and 85.2 million (33.6 percent) who spent more than half of their out-of pocket health care expenses for prescriptions. By 2008, persons living in families with high drug-cost burden had dropped to 8.3 million people (3.1 percent) and 67.1 million (25.4 percent) lived in families whose prescription drug expenses accounted for more than half of their out-of-pocket health expenses. Individuals with high drug-cost burden in 2008 varied with insurance type—7.5 percent for those with public insurance (down from 11.1 percent in 1999), 4.5 percent among those with private nongroup (not employer-related) insurance, and 1.2 percent for those with employer-related insurance.

The findings were based on data from the 1999–2008 Medical Expenditure Panel Surveys of the Agency for Healthcare Research and Quality (AHRQ). The researchers note that 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 boost copayments under Medicaid or otherwise restrict drug use to reduce public spending. Some of the authors were funded in part by AHRQ (HS17695 and HS18657).

More details are in "The financial burden from prescription drugs has declined recently for the nonelderly, although it is still high for many," by Walid F. Gellad, M.D., M.P.H., Julie M. Donohue, Ph.D., Xinhua Zhao, Ph.D., and others in the February 2012 Health Affairs31(2), pp. 408-416.

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Current as of September 2012
Internet Citation: The financial burden from prescription drugs has declined for the nonelderly, but remains a problem for some groups: Research Activities, September 2012, No. 385. September 2012. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/newsletters/research-activities/sept12/0912RA8.html