Only 5% of prescriptions in the United States are paid for entirely via out-of-pocket spending, according to ValuePenguin — with total amounts varying widely by state. (Photo: Shutterstock)
Since 2010, consumer spending on prescription and nonprescription drugs has increased every year, yet out-of-pocket costs dropped during that same time
ValuePenguin, a research and analysis company, recently broke down drug-spending changes by examining data from the U.S. Bureau of Economic Analysis and the Kaiser Family Foundation at the national and state levels. Additionally, researchers looked at prescription spending per household.
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"Each year, we see an increase in overall prescription use, along with higher strengths and stronger dosages being prescribed," Robin Townsend, a health insurance research analyst for ValuePenguin, said in a statement. "Research and manufacturing costs also continue to rise, resulting in higher prices for both prescription and nonprescription drugs."
Townsend noted that the U.S. population increased by 7.4% between 2010 and 2020. While the percentage of people using prescription drugs has held "fairly steady" in this period, the presence of 22.7 million additional people nevertheless had an impact on overall spending figures.
The good news is that only 5% of prescriptions in the United States are paid for entirely via out-of-pocket spending, according to ValuePenguin — with total amounts varying widely by state based on access to health insurance coverage for prescriptions and the cost of medications.
Here are five key findings from the study:
- In 2020, pharmaceutical spending topped $570 billion — a 77% increase from $322 billion in 2010.
- Prescription drug spending rose the most in Washington, D.C. (up 117%), followed by Colorado and Texas (both up 110%). Minnesota, West Virginia, and North Dakota saw modest jumps of between 43% and 49%.
- Out-of-pocket prescription costs (including copays and coinsurance) dropped from $48 billion in 2010 to $47 billion in 2020 — despite a spike to $52 billion in 2015.
- Nationally, U.S. households spent $4,571 per year on prescriptions. Delaware had the highest per household costs, at $6,513, and two other states also were above $6,000 per year: Kentucky ($6,033) and Tennessee ($6,007). States with the lowest prescription costs per household were North Dakota ($2,772), South Dakota ($3,194), and Montana ($3,261).
- A "staggering" 12% of prescriptions in North Dakota are paid entirely out of pocket. By contrast, only 3% or less of prescriptions in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, Ohio, Rhode Island, and Vermont are paid entirely out of pocket.
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