Prescription Medicines Account for Only One-Tenth of Every Health Care Dollar

Prescription Medicines Account for Only One-Tenth of Every Health Care Dollar

The use of prescription medicine is growing because they play an increasingly central role in treatment under clinical guidelines, and because earlier and preventive treatments are becoming more common. Nonetheless, while use of prescription medicines as the first, best therapy to prevent or treat a disease grows, prescription medicines continue to comprise only a small portion of health care spending in the United States.

In fact, according to annual data for 2006 compiled by the Centers for Medicare and Medicaid Services (CMS), just 10 cents of every dollar spent on health care went to medicines (both bran-named and generic, plus the cost of pharmacies and the remainder of the distribution chain).

At the same time, growth in overall prescription drug spending has decreased sharply in recent years. In 2006, it was at the second-lowest level in a decade – 8.5%. It fell to this level even though 2006 was the first year that millions of Medicare beneficiaries first gained comprehensive prescription drug insurance. At just 10% of overall health care spending, new medicines are a valuable part of the health care equation.

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