Apr 22, 2021 - Health

How the pandemic changed prescription drug spending

Data: AJHP; Chart: Sara Wise/Axios
Data: AJHP; Chart: Sara Wise/Axios

Spending on prescription drugs rose even during the pandemic, when many people delayed care. And it will probably continue its rise this year.

Why it matters: Prescription spending is yet another source of financial uncertainty for hospitals hit hard by plummeting volumes last year.

Details: Overall drug spending in the U.S. rose $535.3 billion, or by nearly 5%, between 2019 and 2020, according to the latest trends report from the American Society of Health-System Pharmacists.

  • The biggest increases came in home health care (13%), mail-order pharmacies (9%) and clinics (8%).
  • Drug spending at hospitals, however, dropped by about 5%.

What's next: Hospital and health system pharmacies "should expect to continue suffering from drug expenditure whiplash in 2021 and beyond," said the report's lead author Eric Tichy, who is the division chairman of supply chain management at Mayo Clinic, Rochester.

  • The report says prescription drug spending will likely grow by 4%-6% this year, again with far higher spending outside hospitals.
  • The study attributed most of the growth to increased utilization, and said a large pipeline of expensive new drugs, including cancer treatments and speciality medications, could drive costs higher in the future.
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