Agency for Healthcare 

Medical Expenditure Panel Survey Research and Quality 

STATISTICAL BRIEF #43 

July 2004 

Outpatient Prescription Medicines: 

A Comparison of Expenditures by 

Household-Reported Condition, 

1987 and 2001 

Marie Stagnitti, MPA and Mamatha Pancholi, MS 

Introduction 

This Statistical Brief summarizes differences in expenditures for 

outpatient prescription medicines reported for specific conditions by 

the household in the U.S. civilian noninstitutionalized population for 

the years 1987 and 2001. The brief further analyzes data provided in 

Statistical Brief #33, Outpatient Prescribed Medicines: A Comparison 

of Utilization and Expenditures, 1987 and 2001, by providing 

expenditure rankings for prescribed drugs that households reported 

as purchased to treat specific conditions. 

The data used to estimate the proportion of the population that had 

prescribed medicine expenditures are derived from the 1987 

National Medical Expenditure Survey (NMES) and the Household 

Component of the 2001 Medical Expenditure Panel Survey (MEPSHC). The estimates from the 1987 NMES were adjusted for inflation 

using data from the 1987 and 2001 Consumer Price Index for All 

Urban Consumers (CPI-U). All significance tests were done using 

the adjusted 1987 estimates and the 2001 estimates, and all results 

discussed are statistically significant at the 0.05 level. Over-thecounter medicines and free samples are not included in these 

estimates. Conditions in this brief are household-reported conditions 

that are coded by professional medical coders using the International 

Classification of Diseases, Ninth Revision (ICD-9). 

Findings 

In 1987, the top five household-reported conditions related to a 

prescribed drug purchase as ranked by total annual expenditures 

totaled $13.7 billion (in 2001 dollars) and included the following: 

Highlights 

� Prescribed drugs reported 

as purchased to treat the 

top five household-reported 

conditions as ranked by 

total annual prescribed drug 

expenditures increased 

from $13.7 billion (in 2001 

dollars) in 1987 to $55.9 

billion in 2001. 

� Cholesterol-related 

prescription drug purchases 

rose from $0.2 billion (in 

2001 dollars) in 1987 to $8 

billion in 2001. 

� The average annual 

prescription medicine 

expenditure per person for 

those reporting purchasing 

a cholesterol-reducing drug 

more than doubled from 

1987 to 2001: $240 (in 

2001 dollars) versus $542, 

respectively. 

� Total annual expenditures 

for prescribed drugs reported by households to 

treat mental health conditions increased more than 

tenfold from $1.3 billion (in 

2001 dollars) in 1987 to 

$14.3 billion in 2001. 

� The average annual expenditure per person for prescribed medicines reported 

by households as purchased to treat diabetes rose 

from $252 (in 2001 dollars) 

in 1987 to $800 in 2001. 
1987 Top Five Household-Reported Conditions Total Annual 

Related to a Prescribed Drug Purchase Expenditures 

1. High blood pressure $5.5 billion* 

2. Heart disease $3.5 billion* 

3. Arthritis $1.9 billion* 

4. Diabetes $1.5 billion* 

5. Asthma $1.3 billion* 

Total of Top Five Conditions $13.7 billion* 

* in 2001 dollars

In 2001, the top five household-reported conditions related to a prescribed drug purchase as ranked by 

total annual expenditures totaled $55.9 billion and included the following: 

2001 Top Five Household-Reported Conditions Total Annual 

Related to a Prescribed Drug Purchase Expenditures 

1. High blood pressure $15.1 billion 

2. Mental health disorders $14.3 billion 

3. Diabetes $9.5 billion 

4. Asthma $9.0 billion 

5. High cholesterol $8.0 billion 

Total of Top Five Conditions $55.9 billion 

(figure 1) 

Prescription drug expenditures for the top five household-reported conditions in 1987 represented 39.5 

percent of the $34.7 billion (in 2001 dollars) total expenditures for prescription drugs reported to treat a 

condition. In 2001, prescription drug expenditures for the top five household-reported conditions 

represented 41.7 percent of the $134.1 billion total expenditures for prescription drugs reported to treat a 

condition. The following three household-reported conditions related to a prescribed drug purchase 

ranked among the top five in both 1987 and 2001: high blood pressure, diabetes, and asthma. 

When comparing the 1987 and 2001 rankings of total annual prescription drug expenditures related to a 

household-reported condition, drugs reported as purchased for a cholesterol-related condition jumped 

considerably from over thirtieth to fifth in rank. Cholesterol-related prescription drug purchases were 

markedly higher in 2001 than in 1987—$8 billion versus $0.2 billion (in 2001 dollars), respectively (figure 

2). In 1987, those persons reporting having purchased a prescribed medicine for a cholesterol-related 

condition had an average annual prescription medicine expenditure of $240 (in 2001 dollars) per person. 

In 2001, this average annual prescription medicine expenditure more than doubled to $542 (figure 3). 

In 1987, prescribed drugs reported as purchased to treat mental heath disorders ranked sixth in total 

annual prescription drug expenditures related to a household-reported condition and totaled $1.3 billion 

(in 2001 dollars). Comparatively, in 2001, prescribed drugs reported to treat mental health disorders 

ranked second in total annual prescription drug expenditures related to a household-reported condition 

and totaled $14.3 billion (figure 4). 

In 1987, prescribed drugs reported as purchased to treat arthritis ranked third in total annual prescription 

drug expenditures related to a household-reported condition ($1.9 billion in 2001 dollars). In 2001, 

prescription drugs reported as purchased to treat arthritis fell to eighth in the ranking of total annual 

prescription drug expenditures related to a household-reported condition ($ 6.0 billion). 

Prescribed drugs reported as purchased to treat high blood pressure ranked highest in terms of total 

annual prescribed drug expenditures related to a household-reported condition in both 1987 and 2001. In 

1987, total annual prescription drug expenditures reported as purchased to treat high blood pressure 

totaled $5.5 billion (in 2001 dollars). By 2001, total annual prescription drug expenditures reported as 

purchased to treat high blood pressure nearly tripled to $15.1 billion. 

In 1987, prescribed drugs reported as purchased by households to treat persons with diabetes had an 

average annual expenditure per person of $252 (in 2001 dollars). In 2001, the average expenditure per 

person reporting purchasing a prescribed medicine to treat diabetes more than tripled to $800 (figure 5). 
When comparing the 1987 and 2001 rankings of total annual prescription drug expenditures related to a 

household-reported condition, prescribed drugs reported as purchased for heart disease fell from second 

($3.5 billion, in 2001 dollars) to ninth ($5 billion) in rank. 

Methodology 

Condition categories were aggregated into clinically meaningful categories by using Clinical Classification 

Software (CCS), which was formerly known as Clinical Classifications for Health Policy Research 

(CCHPR). Condition-related expenditures are based on household respondents purchasing a prescribed 

medicine for a reported condition and were computed based on a two-step methodology. First, total 

expenditures for prescription medicines related to a condition were estimated and ranked. This initial 

ranking included double counting for a small percentage of prescription drug expenditures in 2001 and 

1987 (3.4 percent in 2001 and 1.5 percent in 1987). Second, the double counting was removed from the 

ranking by taking those prescribed drug purchases having more than one reported condition and placing 

those expenditures in the total for the condition with the highest total expenditure based on the initial 

ranking, and then the conditions were re-ranked. 

About MEPS and NMES 

The Medical Expenditure Panel Survey (MEPS) is the third in a series of nationally representative surveys 

of medical care use and expenditures. MEPS is cosponsored by the Agency for Healthcare Research and 

Quality and the National Center for Health Statistics. MEPS collects nationally representative data on 

health care use, expenditures, sources of payment, and insurance coverage for the U.S. civilian 

noninstitutionalized population. The first survey, the National Medical Care Expenditure Survey (NMCES) 

was conducted in 1977; and the second survey, the National Medical Expenditure Survey (NMES), was 

carried out in 1987. 

NMES and MEPS data are released to the public in public use data files. NMES data files are available 

from the AHRQ Publications Clearinghouse (E-mail: ahrqpubs@ahrq.gov). MEPS data files are available 

on the MEPS Web site (www.meps.ahrq.gov/). 

References 

For a detailed description of the MEPS-HC survey design, sample design, and methods used to minimize 

sources on nonsampling error, see the following publications: 

Cohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 1. AHCPR Pub. No. 97-0026. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

Cohen, S. Sample Design of the 1996 Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 2. AHCPR Pub. No. 97-0027. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

For more information on the method in which clinical classification codes were aggregated into 

meaningful categories, please see the following: 

Elixhauser, A. et al. Clinical Classifications for Health Policy Research: Hospital Inpatient Statistics, 1996. 

Health Care Utilization Project, HCUP-3 Research Note, Pub. No. 98-0049 Rockville, Md.: Agency for 

Healthcare Research and Quality, 2000. (Clinical Classification software was formerly Clinical 

Classification for Health Policy Research.) 

These publications are available on the MEPS Web site: http://meps.ahrq.gov/. 

For more information on the NMES survey design, see the following publications: 
Cohen, S., R. DiGaetano, and J. Waksberg. Sample design of the 1987 Household Survey. AHCPR Pub. 

No. 91-0037. National Medical Expenditure Survey Methods 3. Agency for Healthcare Policy and 

Research. Rockville, Md.: U.S. Department of Health and Human Services, Public Health Service, 1991. 

Edwards, W. and M. Berlin. Questionnaires and data collection methods for the household survey and the 

survey of American Indians and Alaskan Natives. DHHS Pub. No. (PHS) 89-3450. National Medical 

Expenditure Survey Methods 2. National Center for Health Services Research and Health Care 

Technology Assessment. Rockville, Md.: U.S. Department of Health and Human Services, Public Health 

Service, 1989. 

Cohen, J. and N. Krauss. “Spending and service use among people with the fifteen most costly medical 

conditions, 1997.” Health Affairs. March/April 2003, 129–138. 

Suggested Citation 

Stagnitti, M. and Pancholi, M. Outpatient Prescription Medicines: A Comparison of Expenditures by 

Household-Reported Condition, 1987 and 2001. Statistical Brief #43. July 2004. Agency for Healthcare 

Research and Quality, Rockville, MD. http://meps.ahrq.gov/mepsweb/data_files/publications/st43/stat43.htm 
population, 1987 and 2001 

Consumer Price Index for All Urban Consumers. 

$13.7 

$55.9 

0 

20 

40 

60 

80 

Total annual expenditures for prescription drugs for the top five householdreported conditions 

Dollars (billions) 

1987 2001 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the Household Component of the 2001 Medical Expenditure Panel Survey 

Figure 1. Total annual prescription medicine expenditures reported as purchased for 

the top five household-reported conditions for the U.S. civilian noninstitutionalized 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 

noninstitutionalized population, 1987 and 2001 

$0.2 

$8.0 

0 

2 

4 

6 

8 

10 

cholesterol 

Dollars (billions) 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the Household Component of the 2001 Medical Expenditure Panel Survey 

Figure 2. Total annual prescription medicine expenditures reported by households as 

purchased to treat cholesterol-related conditions for the U.S. civilian 

Total annual expenditures for prescription drugs reported to treat high 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 
$240 

$542 

0 

200 

400 

600 

800 

Average annual per person expenditure for prescribed drugs reported to 

treat high cholesterol 

Dollars 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the Household Component of the 2001 Medical Expenditure Panel Survey 

Figure 3. Average annual prescription medicine expenditure per person for those 

reporting a prescribed medicine purchase to treat a cholesterol-related condition 

for the U.S. civilian noninstitutionalized population, 1987 and 2001 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 

population, 1987 and 2001 

Consumer Price Index for All Urban Consumers. 

$1.3 

$14.3 

0 

5 

10 

15 

20 

conditions 

Dollars (billions) 

1987 2001 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the Household Component of the 2001 Medical Expenditure Panel Survey 

Figure 4. Total annual prescription medicine expenditures households reported as 

purchased for mental health conditions for the U.S. civilian noninstitutionalized 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001 

Total annual expenditures for prescription drugs reported to treat mental health 
noninstitutionalized population, 1987 and 2001 

$252 

$800 

0 

200 

400 

600 

800 

1000 

Average annual per person expenditure for prescribed drugs reported to 

treat diabetes 

Dollars 

1987 2001 

Consumer Price Index for All Urban Consumers. 

Source: Center for Financing, Access, and Cost Trends, AHRQ, 1987 National Medical Expenditure Survey 

and the Household Component of the 2001 Medical Expenditure Panel Survey 

Figure 5. Average annual prescription medicine expenditure per person for those 

reporting purchasing a prescribed medicine to treat diabetes in the U.S. civilian 

Note: Estimates for 1987 were adjusted for inflation to 2001 dollars using data from the 1987 and 2001