Politicians’ Narrow Focus On Prescription Drug Spending Is Myopic

House Minority Leader Nancy Pelosi, reacts after voting results during a House Democratic election night event in Washington, D.C., U.S., on Tuesday, Nov. 6, 2018. Photographer: Yuri Gripas/Bloomberg© 2018 Bloomberg Finance LP

On election night House minority leader Pelosi and President Trump had a phone call in which they discussed possible areas of cooperation. Specifically, they mentioned funding for infrastructure and curbing of prescription drug spending. In an era where bipartisanship is sorely lacking, it’s good that common ground is being sought. But, it does raise the question why when it comes to healthcare the exclusive focus would be placed on containment of prescription drug spending.

National health expenditure growth is expected to average 5.5% annually over 2017-2026. The facts on hospital inpatient, physician, and prescription drug spending indicate that all three are drivers of higher healthcare spending.

Among the major sectors of healthcare, prescription spending growth is projected to be 6.3% on average annually for the 2017-2026 period. This is less than growth in home health spending, and only slightly above expenditure growth in both hospital care and physician services.

When addressing healthcare spending it’s essential to keep in mind the shares each sector currently has relative to overall healthcare expenditures, and the projected share in 2026, as shown in the table below.


Sam Smith