Pharmaceutical spending

Pharmaceutical spending accounts for approximately 20% of total health spending in OECD countries when taking into account medicines dispensed in both outpatient and inpatient settings of care. Recent developments in the pharmaceutical market and spending raise concerns for the future:

  • Spending has become increasingly skewed toward high-cost “specialty medicines” which now account for between 30% and 50% of spend and this percentage will increase in future
  • Launch prices of new medicines have been soaring in some therapeutic categories – in the US the prices of new cancer medicines now typically exceed USD 10,000 per month and one was launched at USD 64,000 per month. The prices of orphan medicines are also very high
  • New hepatitis C treatments, which represent a real breakthrough for patients, have been launched at a list price of up to USD 84,000. They were assessed as cost-effective at this price although the company recouped 25 times the initial outlay in R&D in less than two years

The OECD is preparing a study that will focus on therapeutic areas where new medicines are very costly and/or have a high budget impact for health systems, such as oncology, rare diseases, HIV, Hepatitis C, diabetes and Alzheimer’s disease. The overall objective is to improve patient access to innovative treatments and ensure the sustainability of health spending as well as continued innovation that meets patient needs.

To read more about the study on the OECD website, go to: Pharmaceuticals