Drug Spending Research Initiative

Prescription drug costs in the United States are increasing, with spending growth continually outpacing that of all other parts of the health care sector. Net spending on pharmaceuticals alone is expected to reach nearly $400 billion by 2020, up from $310 billion in 2015.

Patients bear the burden of rising pharmaceutical costs in several ways, including higher insurance premiums and increased out-of-pocket costs, which can limit access to needed therapies. Taxpayers also shoulder the financial burden as spending increases in public programs such as Medicare and Medicaid.  

Multiple factors are driving these growing costs. Historically, U.S. health care has tended to adopt drug therapies when they provide additional clinical benefit compared to existing treatments, independent of the cost of the product. Today, a growing share of therapies entering the market are expensive pharmaceuticals designed to treat complex, chronic conditions, such as cancer and autoimmune diseases. These products, known as specialty drugs, currently make up 37 percent of drug costs but account for less than 2 percent of all prescriptions.

Existing pharmaceuticals are also contributing to rising drug spending, with manufacturers choosing to raise prices on many drugs year after year, including those with multiple therapeutic alternatives, such as treatments for multiple sclerosis and rheumatoid arthritis.

The Pew Charitable Trusts’ drug spending research initiative seeks to understand the underlying drivers of rising drug costs and identify policy options to better manage spending on these products in ways that help to ensure that patients have access to needed treatments.

Our Work

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  • Other Countries Control Drug Prices. The U.S. Could, Too.

    Public opinion surveys show that most Americans are deeply concerned about rising drug prices. That’s not surprising: Overall, we spend twice as much on drugs as our counterparts in other developed countries. For example, in 2015, the most recent year for which data are available, an American patient and insurer could expect to pay about $2,670 for a month’s supply of adalimumab, a... Read More

  • Policy Proposal: Allow Medicare to Negotiate Drug Prices in Part D

    Under the Part D program, private prescription drug plans provide drug coverage to Medicare enrollees. These plans negotiate drug rebates and other discounts with pharmaceutical manufacturers, which reduce program costs and allow plans to compete for beneficiaries based on lowering premiums and patient out-of-pocket costs. However, the federal government is prohibited from negotiating drug prices... Read More

  • Pew Offers Feedback on Potential Prescription Drug Models

    On Nov. 20, The Pew Charitable Trusts’ drug spending research initiative submitted comments to the Centers for Medicare & Medicaid Services in response to a request for information on a new direction for the Innovation Center. The comments discussed two areas where the Innovation Center could test prescription drug models with potential to increase competition, reduce costs to Medicare... Read More

Media Contact

Erin Davis

Officer, Communications

202.540.6677