NCPA - National Center for Policy Analysis

Americans Want Their Prescriptions, But Hate The Cost

January 11, 2000

Americans are spending more on health care than ever before. And costs for prescription drugs are a large component of those costs.

As pharmaceutical companies spend increasing millions on developing newer and better remedies, drug costs are increasing -- and that has become a big political issue. Vote-hungry politicians vow to contain those costs, but at what price to future research?

  • Americans will spend an estimated $110 billion to $120 billion on prescription drugs this year, up from $37.7 billion in 1990.
  • Children and college students spend an average of $10 a month on prescriptions; adults 18 to 65, $30; and those over 65, $105.
  • Health care expenditures in general are growing 7 percent to 10 percent a year -- but drug expenditures are rising 17 percent to 20 percent annually.
  • Some 50 percent of the growth in spending for prescription drugs is for those which have come on the market since 1994.

Drugs can be looked at as splendid bargains if they keep patients out of hospitals and avert the need for costly medical procedures, industry officials point out.

Source: Kathleen Day, "The Driving Force," Washington Post, January 9, 2000.


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