Federal actuaries predict retail prescription drug spending in the United States will grow 4.3% this year, with growth accelerating to 4.7% next year and to 5.1% in 2024.
The Centers for Medicare & Medicaid Services (CMS) Office of the Actuary released its annual National Health Expenditure Projection report this week. It appears in the April 2022 issue of Health Affairs (subscription required).
CMS said retail drug spending grew at a 3.0% rate in 2020. It said spending growth likely accelerated in 2021 to 4.7%, with total U.S. retail drug spending reaching $364.8 billion.
Higher Medicaid Spending Growth
This acceleration is “influenced by faster Medicaid drug spending growth, driven, in part, by faster projected Medicaid enrollment growth,” CMS said. “In addition, private health insurance prescription drug spending growth is expected to have remained low but still be somewhat faster than in 2020, partly due to higher utilization growth resulting from new prescriptions generated by faster growth in physician office visits.”
CMS predicted that spending growth in 2023-24 will be “a function of faster expected drug price growth as well as faster increases in the use and intensity of prescription drugs.”
“Drug prices are expected to rise in both years at a rate similar to economywide price inflation but above recent historical periods, when significant growth in drug rebates resulted in slower net drug price growth,” CMS said. “Moreover, growth in the use and intensity of drugs is expected to accelerate, as well, in part because of a larger anticipated impact from new drugs approved over the course of 2021–22.”
CMS projects that retail prescription drug spending will grow at 5.2% for 2025-30, “reflecting slightly higher price growth and the impact of new pharmaceuticals launched in the United States over the course of 2022–26.”
