Analysis Finds Sharp Increase in Concentration of Spending on Prescription Drugs

Between 2001 and 2018, the overall concentration of health care expenditures in the United States remained strikingly stable, with one exception: a sharp increase in the concentration of prescription drug spending. Researchers reported their findings online in JAMA Network Open.

“In 2001, one-half of all expenditures on prescription drugs were concentrated in 6.0% of the US population,” researchers wrote, “but by 2018, this proportion had decreased to 2.3%.”

The cross-sectional study was based on data collected between 2001 and 2018 from Medical Expenditure Panel Surveys. Researchers were interested in identifying trends in the concentration and distribution of health care expenditures over the time period.

The study found that, in any given year, just under 5% of the US population accounted for 50% of health care spending. About 20% of the population fell into the “nonspender” category.

“What is remarkable is that despite more than 2 decades of explicit policy aimed at increasing preventative care with a goal of decreasing the incidence of acute, expensive conditions, these percentiles have hardly changed,” researchers wrote. “This finding is consistent with what Berk and Fang have previously noted and, furthermore, carries over in nearly all population subgroup and expenditure category analyses.”

Regarding prescription drugs, the increase in spending concentration for the category began around 2005 and continued through the analysis’ final year, the study found. The timing coincided with patent expirations and genericization of widely used primary care drugs, such as statins, angiotensin receptor blockers, and selective serotonin reuptake inhibitors, researchers noted. Additionally, the biopharmaceutical industry also pivoted to high-priced specialty drugs with smaller patient populations.

“If this trend continues,” they wrote, “it will have implications for the minimum scale of risk-bearing and drug management needed for health insurance plans to operate efficiently. It will also place constraints on optimal cost-sharing features of insurance products.”

Reference:
Holle M, Wolff T, Herant M. Trends in the concentration and distribution of health care expenditures in the US, 2001-2018. JAMA Netw Open. 2021;4(9):e2125179. doi:10.1001/jamanetworkopen.2021.25179