Between 2018 and 2023, prescription drug expenditures in private drug plans grew at a compound annual growth rate of 7.1 per cent, according to a new report by the Patented Medicine Prices Review Board.
It found in 2023, prescription drug expenditures for private plans rose by 12.9 per cent, returning to the pre-pandemic growth trend.
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Drug costs, accounting for 88 per cent of prescription drug expenditures, increased by 14.1 per cent from 2022 to 2023, while dispensing costs, representing the remaining 12 per cent, grew by 4.5 per cent. The primary driver was the increased use of higher-cost medicines, averaging 6.3 per cent from 2018 to 2023 and peaking at 9.2 per cent in 2023.
Private insurers typically covered 88 per cent of the total prescription costs, leaving beneficiaries responsible for the remaining 12 per cent, the report noted.
By 2023, medicines costing more than $10,000 and $25,000 annually represented a third and a sixth of total drug costs, respectively. Though a growing number of these high-cost drugs were reimbursed by private plans, they were used by only 1.5 per cent and 0.4 per cent of claimants, respectively. Notably, the top five per cent of high-cost claimants accounted for nearly two-thirds of total drug costs in private plans.
Read: High-cost medicines driving drug costs for public, private plans: report