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.

fact sheet

Policy Proposal: Expedited Review of Generic Drug Applications

Competition from generic drugs can significantly reduce spending on pharmaceuticals. The number...

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Speeches & Testimony

Pew Discusses Drivers of Drug Spending Before Senate HELP Committee

On June 13, Allan Coukell, senior director of health programs for The Pew Charitable Trusts...

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Our Work

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  • Policy Proposal: Require Rebates on Drugs for Low-Income Medicare Beneficiaries

    Of the 41 million Medicare Part D beneficiaries in 2016 (approximately 7.5 million of whom were also eligible for Medicaid), 12 million received a low-income subsidy (LIS, also known as Extra Help). The LIS helps beneficiaries with limited incomes to pay their Part D premiums and any cost-sharing on drugs, including deductibles and copayments. This assistance comes from subsidies the federal... Read More

  • Drug Spending Glossary

    Drug spending is a complex issue that involves a range of products, policies, and stakeholders across the health care system. Understanding the many factors that affect drug spending is critical to grasping how pharmaceuticals are priced and purchased. These definitions provide a frame of reference when examining the drug spending debate. Read More

  • Pew Comments on Generic Drug Competition at FDA Public Meeting

    On Sept. 18, The Pew Charitable Trusts’ drug spending research initiative submitted comments to the Food and Drug Administration in response to its public meeting, “Administering the Hatch-Waxman Amendments: Ensuring a Balance Between Innovation and Access.” Pew discussed ways to build on the success of the Drug Price Competition and Patent Term Restoration Act of 1984, or the... Read More

Media Contact

Erin Davis

Officer, Communications