CMS: Medicare, Medicaid to shoulder bulk of drug expenses by 2018

In a recent article on, Adam Fein, president of Pembroke Consulting and CEO of Pembroke's Drug Channels Institute, examined recent drug-spending forecasts from the Centers for Medicare and Medicaid Services (CMS), including the following predictions:

• CMS expects the employer-sponsored insurance market to be slightly more resilient than it had previously projected.
• By 2018, Medicare, Medicaid and other public programs will pay more than employers pay for drugs.
• CMS still projects that individually purchased private insurance will account for a small share of drug spending.

Fein said CMS separates private health insurance spending into two categories: employer-sponsored private insurance and other health insurance, which includes Medicare supplemental coverage and individually purchased plans.

It is projected that by 2024, 4 percent of prescription-drug expenditures will be paid by individually purchased private insurance, 44 percent by public funds, 39 percent by employer-sponsored private insurance and 12 percent by consumers out-of-pocket.

CMS estimates that annual U.S. outpatient prescription-drug expenditures will grow by $259.2 billion, from $305.1 billion in 2014 to $564.3 billion in 2024.

The full Fein article can be accessed here:

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