The United States spends hundreds of billions of dollars on prescription drugs each year, but the money flows through a complex network of drug manufacturers, wholesalers, pharmacies, pharmacy benefit managers and health insurance plans that defies easy analysis.
A new report from Pew Charitable Trusts digs into that sometimes opaque supply chain, and finds plenty of opportunities for profit-making at each point in the system.
Here are a few key figures from the study:
- Net spending on prescription drugs rose from $250 billion in 2012 to $341 billion in 2016.
- Of the $341 billion total, the government paid $140 billion, patients paid $104 billion and employers paid $98 billion.
- While out-of-pocket spending has remained relatively stable, patients are paying more for drugs through rising insurance premiums.
- Retail pharmacy revenues more than doubled between 2012 and 2016, from $31 billion to $77 billion.
- Wholesalers, pharmacy benefit managers and health insurance plans each claim about 5 percent of overall spending.
- Manufacturers claim about 60 percent of all spending.
The bottom line: The prescription drug supply chain is dauntingly complex, but all the stakeholders have found profitable niches within it as overall spending increases year after year.
