Back in the day… before there was NO PBM industry. I remember it being reported that Rx costs were about 6% of total healthcare expenditures.
The PBM industry was a result of an AUW contract at the end of 1969. I don’t remember, but probably the effective date was the first of 1970.
Back then, the average Rx price was $4 to $5 each. Brand name meds were 90% to 95% of all Rxs. There was also no DEA. There was no PDMP, No prior authorizations, no mandatory generic substitution, no step therapy, no days supply limitations, and on and on that the PBM industry & DEA gave us.
According to this question, I asked perplexity.ai. The cost of medication today is upwards of 20% of total medical/healthcare expenses. Today 90% of Rxs are paid for by one of the 60 PBMs, and the top 3 PBMs control 80%-90% of all Rxs paid for by the PBMs. 85%-90% of prescriptions are now filled with generics.
I suggest that you watch this blog post from two months ago by Senator Elizabeth Warren, ripping the President of United Health a “new one”. https://www.pharmaciststeve.com/warren-blasts-united-health-ceo-for-monopolistic-practices-that-harm-patients/
The same United Health that is endorsed by AARP and sells its Medicare programs to AARP members
Then there is this video by Dr. Eric Bricker, he demonstrates how Medicare Advantages sort of “cooks the books” so that they are technically not spending as much on pt care as their contract with Medicare/Feds they agreed to pay on pt care.
Dr. Bricker also has this website where he has created videos that describe what he has uncovered about how our healthcare system is not much more than your basic for-profit corporations
what percentage of total medical expenses is total prescription costs?
Based on the search results provided, prescription drug costs represent a significant portion of total medical expenses in the United States. Here are the key points:
1. In 2021, the U.S. health care system spent $603 billion on prescription drugs, before accounting for rebates. Of this amount, $421 billion was spent on retail drugs[2].
2. Total inflation-adjusted expenditures on prescription drugs grew from $520 billion in 2016 to $603 billion in 2021, a 16 percent increase[2].
3. In 2016, prescription drug costs accounted for $329 billion out of $3,337 billion (17.9% of GDP) spent on national health expenditures[1].
4. As of 1998, prescription drugs accounted for almost 16 percent of total health care expenditures[3].
5. Specialty drugs, which are typically high-cost medications, represented 50% of total drug spending in 2021[2].
While the exact percentage for the most recent year is not explicitly stated in the search results, we can infer that prescription drug costs continue to represent a substantial portion of total medical expenses. Based on the trend from 1998 to 2016 and the continued growth in drug spending, it’s likely that prescription drugs currently account for somewhere between 15-20% of total medical expenses in the United States.
It’s important to note that these figures can vary depending on factors such as whether retail or non-retail drugs are included, and whether rebates and discounts are accounted for in the calculations.
Citations:
[1] https://www.actuary.org/content/prescription-drug-spending-us-health-care-system
[2] https://aspe.hhs.gov/sites/default/files/documents/88c547c976e915fc31fe2c6903ac0bc9/sdp-trends-prescription-drug-spending.pdf
[3] https://hpi.georgetown.edu/rxdrugs/
[4] https://www.cbo.gov/publication/57772
[5] https://www.healthsystemtracker.org/chart-collection/health-expenditures-vary-across-population/
Filed under: General Problems
We have a Federal Employee BCBS Medicare Part D policy. As of the end of June I have already met the catastrophic cost for everything on their formula. This does not include the monthly charge for Taltz, which is not on their formulary. The cost of prescriptions is almost unbelievable.