The Department of Health and Human Services (HHS) estimates that U.S. spending on prescription drugs rose to $457 billion in the year 2015 and will persist to increase with respect to the percentage of total healthcare spending.
The projected increase is said to be approximately 8 percent higher than the 2014 estimated values.
The latest prescription drug spending accounts for about 16.7 percent of the $2.729 trillion funds spent on overall healthcare services in 2015.
Retail drugs accounted for $328 billion in costs. Non-retail medicines such as cancer treatments administered at hospitals and doctors' clinics entailed another $128 billion.
The increasing trend will not be put to a halt anytime soon. HHS estimates that overall drug spending will rise to about $535 billion by 2018 and will account for approximately 16.8 percent of all healthcare expenditures.
The Reason Behind
HHS explains the possible reasons behind such growth in prescription drug spending. From 2010 to 2014, the factors that paved the way for the tremendous rise include population growth by 10 percent, increase in the number of prescription drugs per individual by 30 percent, inflation rise by 30 percent and cost increases greater than inflation by 30 percent.
Proposals To Mitigate The Problem
One proposal to mitigate the problem is to change the way the Centers for Medicare and Medicaid Services pays physicians who administer drug in their clinics.
Medicare Part B compensates doctors by paying the average sales of the drug plus another 6 percent. In the proposed scheme, doctors would be paid a 2.5 percent fixed rate amounting to $16.80 per drug per day.
Linda Cahn from Pharmacy Benefit Consultants says that the rise in prescription drug spending goes to show that those paying for the bulk of the drugs' costs are not doing something to control the prices.
Experts had a discussion about the matter at the Johns Hopkins University on Tuesday. Poll results from Kaiser Family Foundation presented in the event showed that the public blame drug makers, instead of insurance firms for the high drug costs. The people also said that the federal government must be able to negotiate Medicare drug costs with pharmaceutical companies.
Former House Energy and Commerce Committee Chairman Henry Waxman says competition is one of the key solutions to overpriced medicine. He adds that the government is less likely to have better luck than the benefit drug makers use for its medicine plans.
"We'll just have to keep looking for some things we can try out," he says. "Every solution you get will lead to other problems."