In early September, the Centers for Medicare & Medicaid Services (CMS) released their 10-year projection of national health expenditures (NHE), including retail spending on prescription drugs. Their data show the retail prescription drug share of NHE starting at 9.4 percent in 2013, rising to 9.6 percent in 2015, and falling back to 9.4 percent in 2019–2023.
A more complete picture of spending on pharmaceuticals would include the nonretail segment. This segment includes drugs that are purchased by providers such as hospitals, physician offices, nursing homes, and home health agencies and billed to patients as part of the provider bill. Spending for this nonretail segment is not separated in the CMS health accounts.
In June 2014, the Altarum Center for Sustainable Health Spending (CSHS) released a report that provided estimates of nonretail spending on prescription drugs for the years 2008 through 2013. In a new report, CSHS has added estimates of the nonretail prescription drug component to the 10-year CMS NHE projection.
These estimates (see the chart below) provide a more complete picture of the projected prescription drug share of national health expenditures. The nonretail component adds somewhat less than four percentage points to the share each year from 2013 through 2023. The overall share rises from 13.1 percent in 2013 to 13.5 percent in 2015 and then slowly declines until it reaches 13.0 percent in 2021.
Ten-Year Projection of the Prescription Drug Share of NHE, Including Nonretail
Source: Center for Sustainable Health Spending Data Brief
The relatively stable nonretail drug share of NHE is somewhat surprising in view of the rapid reported growth in spending on specialty drugs and their relative importance in the nonretail segment.[1] However, the report shows that while about half of spending on specialty drugs is nonretail, most of the growth in such spending is occurring in the retail segment.
NOTES
[1] In this study, specialty drugs are defined as “being typically high-cost, scientifically engineered drugs used to treat complex chronic conditions that require special storage, handling, and administration, and involve a significant degree of patient education, monitoring, and management” (http://www.imshealth.com/imshealth/Global/Content/Corporate/Press%20Room...).