What’s Driving Growth in Prescription Drug Spending?

Innovation in prescription drugs has improved the health of millions of Americans. But the costs of prescription drugs have continued to increase, and total U.S. retail spending on drugs will exceed $500 billion a year by 2025. This spending is driven largely by high-priced brand medications, which make up only 11% of prescriptions, but drive 73% of all expenditures on prescription drugs. And as the figures below show, the vast majority of this spending accrues directly to pharmaceutical manufacturers, who have the highest profit margins in the supply chain and accumulate 84% of profits per brand prescription.