U.S. Spent Roughly $200 billion in 2019 on Prescription Drug Costs

October 23, 2024

U.S. Spent Roughly $200 billion in 2019 on Prescription Drug Costs

Researchers Find Governments Cover Majority of U.S. Drug Spending through Public and Private Insurance

Washington, D.C. - Federal state and municipal governments in the United States spent more than $50 billion on outpatient prescription drugs through private insurers and $150 billion in direct government expenditures for outpatient retail prescription drugs in 2019, according to new analysis released today in the Journal of General Internal Medicine.

Researchers, including Public Citizen research associates Dr. David U. Himmelstein and Dr. Steffie Woolhandler,concluded that governments directly or indirectly fund most drug purchases, including substantial expenditures through private insurance that impact government budgets.That's why, they say, governments should be allowed to regulate drug prices.

In response, Steve Knievel, access to medicines advocate at Public Citizen, issued the following statement:

"The next drug price reform efforts policymakers take must reach people with private insurance, in addition to providing greater relief to Medicare enrollees. Lowering drug prices for patients outside of Medicare would benefit tens of millions more people and stands to save the federal government billions of dollars in drug costs channeled through private insurance.

This analysis shows that private drug spending has a substantial impact on the federal budget, so policies that lower drug prices outside of government health plans should be considered fully permissible under Senate budget reconciliation rules. The Senate Parliamentarian was wrong to force legislators to strip policies lowering prices for people with private insurance from the Inflation Reduction Act."