U. S. Department of Health and Human Services

Agency for Healthcare Research and Quality

www.ahrq.gov

MEPS Chartbook No. 12

Medical Expenditure Panel Survey

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Outpatient Prescription 

Drug Expenses, 1999

Medicare/ Population Therapeutic

non-Medicare subgroups classes of drugs
Suggested citation:

Stagnitti MN, Miller GE, Moeller JF. Outpatient prescription drug expenses, 1999. Rockville (MD):Agency for Healthcare Research 

and Quality; 2003. MEPS Chartbook No.12. AHRQ Pub. No. 04-0001.

The estimates in this report are based on the most recent data available from MEPS at the time the report was written. However, selected

elements of MEPS data may be revised on the basis of additional analyses, which could result in slightly different estimates from those shown

here. Please check the MEPS Web site for the most current file releases—

www.meps.ahrq.gov

AHRQ is the lead Federal agency charged with supporting research designed to improve the quality of health care, reduce its cost, address

patient safety and medical errors, and broaden access to essential services.AHRQ sponsors and conducts research that provides evidence-based

information on health care outcomes; quality; and cost, use, and access.The information helps health care decisionmakers—patients and clinicians,

health system leaders, and policymakers—make more informed decisions and improve the quality of health care services.

MEPS Chartbook No. 12 by:

Marie N. Stagnitti, M.P.A.

G. Edward Miller, Ph.D.

John F. Moeller, Ph.D.
Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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i

In 1999, outpatient prescription drug

expenses in the U.S. civilian

noninstitutionalized population totaled

$94.2 billion and accounted for almost

16% of total health expenses.

Medicare beneficiaries comprised only

14% of the community population but

accounted for more than 41% of

prescription medicine expenses. The

average drug expense was about four

times larger for Medicare beneficiaries

($990) than for the non-Medicare

population ($236).

Medicare beneficiaries paid for a much

larger portion of their drug expenses

out of pocket (57%) than the nonMedicare population (39%).

The average prescription drug expense

per person in the community population

(including people with no expenses) was

$341. The average per person with an

expense (about 62% of the population)

was $547.

The top 10% of the population (that is,

the 10% of the population with the

highest drug spending) accounted for

71% of expenses for the non-Medicare

population and 41% of expenses among

Medicare beneficiaries.

Drug expenses were concentrated

among people in fair or poor health in

both the Medicare and non-Medicare

population.

executive summary

Nearly half (46%) of the total spending

for outpatient prescription drugs was

paid by patients and their families. This

percentage was more than twice as

large as the out-of-pocket share for total

health expenses (19%).

The five therapeutic classes of drugs

accounting for the largest expenses in

the community population in 1999 were

cardiovascular agents, hormones, central

nervous system agents,

psychotherapeutic agents, and

respiratory agents.

The four therapeutic classes of drugs

accounting for the largest expenses for

children in the community population in

1999 were respiratory agents, antiinfectives, psychotherapeutic agents, and

topical agents.

1 Introduction

2 Source of Data

5 Section 1

Overview

17 Section 2

Population Subgroups

27 Section 3

Therapeutic Classes of Drugs

33 References

34 Definitions of Terms

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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iii

content

s

This chartbook presents data

from the 1999 Medical Expenditure

Panel Survey (MEPS), which is

sponsored by the Agency for

Healthcare Research and Quality

(AHRQ), on spending for

outpatient prescription medicines

for the U.S. civilian

noninstitutionalized population.

This chartbook is organized into

three sections. Section 1 presents a

summary of overall outpatient

prescription medicine expenses and

payments. Section 2 contains

outpatient prescription medicine

expenses and payments by various

population groups. Section 3

contains expenses on outpatient

prescription drugs by therapeutic

class. See the “Definitions of

Terms” section for information and

definitions of the categories used

throughout the Chartbook.

This Chartbook and other

MEPS publications are available

electronically on the MEPS Web site

at <http://www.meps.ahrq.gov/>.

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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1

int

roduction

The estimates presented in this

report come from the Medical

Expenditure Panel Survey (MEPS)

Household Component. MEPS is

cosponsored by the Agency for

Healthcare Research and Quality

(AHRQ) and the National Center

for Health Statistics (NCHS). It is

a nationally representative survey of

the U.S. civilian noninstitutionalized

(community) population that

collects data on medical expenses

for both individuals and households.

The MEPS Household Component

collects detailed data on

demographic characteristics, health

conditions, health status, use of

medical care services, charges and

payments, access to care, satisfaction

with care, health insurance

coverage, income, and employment.

Other MEPS components collect

data on the use, charges, and

payments reported by medical care

providers and on the health

insurance offerings and costs

reported by employers.

Sources for more information

on technical aspects of MEPS—such

as the survey design and the

methodology used to obtain

estimates—are given in the

references section. 

MEPS data are released to the

public in summary reports and

microdata files. Summary reports

are released in print and/or as

electronic files on the MEPS Web

site (www.meps.ahrq.gov). All

microdata files are available for

download from the MEPS Web site

in compressed formats (Zip and

self-extracting executable files).

Selected data files are available on

CD-ROM from the AHRQ

Clearinghouse.

The estimates shown in this

Chartbook are drawn from analyses

from public use files (1999 Full Year

Consolidated Data File HC-038

and 1999 MEPS Prescribed

Medicines File HC-033A) and from

other information available on the

MEPS Web site. Only prescription 

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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3

source of data
Agency for Healthcare Research and Quality

4

Medical Expenditure Panel Survey

medicines, not over-the counter

medicines, are included. Drugs were

assigned to therapeutic classes by

linking HC-033A to the Multum

Lexicon database, a product of

Cerner Multum, Inc.

(http://www.multum.com).

Only differences that are

statistically significant at the 0.05

level are discussed in the text. In

some cases, totals may not add

precisely to 100% because of

rounding. 
Overview Outpatient prescription drugs

play an ever-increasing role in health

care delivery in the United States.

MEPS data show that total

outpatient drug expenses for the

U.S. civilian noninstitutionalized

population grew from $65.3 billion

in 1996 to $94.2 billion in 1999, an

increase of 44%. Meanwhile,

prescription medicine spending

increased its share of overall health

care spending from 12% in 1996 to

16% in 1999.

This section presents

information on overall expenses and

sources of payments for outpatient

prescription drugs used by the

community population in 1999. It

highlights and compares various

statistics for the total, Medicare, and

non-Medicare populations. It also

presents information on the

concentration of expenses for the

total, Medicare, and non-Medicare

populations. This information is

useful in determining how equitably

and efficiently drug resources are

used.

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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5

section 1
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Agency for Healthcare Research and Quality

6

Medical Expenditure Panel Survey

What proportion of the community

population has outpatient prescription

medicine expenses?

• In 1999, 62% of the 276.4

million people in the U.S. civilian

noninstitutionalized population

had an outpatient prescription

drug expense. 

• Outpatient prescription drug

expenses totaled $94.2 billion,

accounting for almost 16% of

total health care spending.

• The community population

purchased a total of 2.1 billion

prescriptions, an average of

almost eight prescriptions per

person.

No drug

expense

37.6%

Drug

expense

62.4%

276.4 million people

2.1 billion prescriptions

Community population

Outpatient prescription medicines

U.S. community population, 1999
• In 1999, about half of the

community population had drug

expenses of less than $31 (the

median value). Most people with

expenses below the median did

not have any drug expense.The

mean (average) expense per

person was $341. 

• Among people with at least one

drug purchase, the mean expense

($547) was about three times

larger than the median expense

($174). 

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Agency for Healthcare Research and Quality

7

Medical Expenditure Panel Survey

What are the mean and median expenses for

prescription medicines?

Per person Per person with expense

$0

$100

$200

$300

$400

$500

$600

$31

$547

$174

Mean Median Mean Median

$341

Mean and median expenses

Outpatient prescription medicines

U.S. community population, 1999
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• In 1999, the 38.6 million

Medicare beneficiaries comprised

only 14% of the community

population but accounted for

40% of total prescription drug

purchases and 41% of total

prescription medicine expenses. 

• The average drug expense per

Medicare beneficiary ($990) was

more than four times as large as

the average expense for the nonMedicare population ($236). 

Agency for Healthcare Research and Quality

8

Medical Expenditure Panel Survey

To what extent do Medicare beneficiaries

purchase a disproportionate share of

prescription medicines?

Non-Medicare

Medicare

Population Purchases Expenses

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

86.0%

39.6%

59.5%

14.0%

60.4%

40.5%

Aggregate expenses and purchases

Outpatient prescription medicines

U.S. community population, 1999

$990

$236

Mean expense

$0

$100

$200

$300

400

$500

$600

$700

$800

$900

$1,000

86%

39.6%
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• In 1999, the difference in mean

drug expenses between the

Medicare and non-Medicare

populations came primarily from

differences in the quantities of

drugs purchased rather than

differences in the prices paid for

drugs. 

• A higher percentage of the

Medicare population (88%) than

the non-Medicare population

(58%) purchased prescription

drugs. 

• The average number of

prescription drug purchases for

people with an expense was

higher for Medicare beneficiaries

(24) than for the non-Medicare

population (9).

Agency for Healthcare Research and Quality

9

Medical Expenditure Panel Survey

What factors account for higher average

prescription medicine expenses for the

Medicare population?

Medicare

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50 $47

Non-Medicare

$45

Average prescription medicine price

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 87.8%

Non-Medicare

58.3%

Percent of population with

 expense

0

5

10

15

20

25 24

Non-Medicare

9

Average number of purchases

per person with expense

Medicare Medicare

Outpatient prescription medicines

U.S. community population, 1999
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• In 1999, outpatient drug

expenses were more concentrated

in the non-Medicare population

than among Medicare

beneficiaries.

• The top 10% of the population

(that is, the 10% of the

population with the highest drug

spending) accounted for 41% of

expenses for the Medicare

population and 71% of expenses

for the non-Medicare population.

Similarly, the top 30% of the

population accounted for 75% of

Medicare drug expenses and 95%

of non-Medicare expenses.

• The bottom 50% (those below

the median drug expense of

$550 for Medicare beneficiaries

and $17 for the non-Medicare

population) accounted for 9% of

Medicare drug expenses and less

than 1% of non-Medicare

expenses.

Agency for Healthcare Research and Quality

10

Medical Expenditure Panel Survey

How are prescription medicine expenses

concentrated in the Medicare and 

non-Medicare populations?

Medicare

0%

20%

40%

60%

80%

100%

74.7%

41.0%

Concentration of drug expenses

8.8%

0%

20%

40%

60%

80%

100% 95.1%

70.6%

0.3%

Non-Medicare

Top 10% Top 30% Bottom 50%

Outpatient prescription medicines

U.S. community population, 1999
• In 1999, nearly half of the $94.2

billion spent for outpatient

prescription drugs was paid by

patients and their families. In

comparison, only 19% of overall

health care spending was paid for

out of pocket. 

• Private health insurance was the

largest third-party payer for

prescription drugs, accounting

for a little more than a third of

total expenses. Public insurers—

primarily Medicaid—and other

sources accounted for the

remaining 18% in expenses.

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Agency for Healthcare Research and Quality

11

Medical Expenditure Panel Survey

Who pays for prescription medicines?

0%

10%

20%

30%

40%

50%

35.4%

46.2%

Source of payment

18.4%

$0

$10

$20

$30

$40

$50

$33.4

$43.5

$17.3

Out of pocket Private Public and other

Percent Amount in billions

Outpatient prescription medicines

U.S. community population, 1999
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• In 1999, out-of-pocket payments

accounted for nearly three-fifths

(57%) of all prescription

payments for Medicare

beneficiaries but slightly less than

two-fifths (39%) of prescription

payments for the non-Medicare

population.

• The share of prescription

expenses paid by private

insurance was three times as large

for the non-Medicare population

(48%) as for Medicare

beneficiaries (16%). 

• The share paid by public

insurance and other sources was

twice as large for Medicare

beneficiaries (26%) as for the

non-Medicare population (13%). 

• Although total drug expenses for

the Medicare population ($38.2

billion) were only about twothirds the size of total expenses

for the non-Medicare population

($56.1 billion), out-of-pocket

expenses were about $22 billion

for each group.

Agency for Healthcare Research and Quality

12

Medical Expenditure Panel Survey

Are sources of payment different for the

Medicare and non-Medicare populations?

0%

20%

40%

60%

80%

16.4%

57.2%

Source of payment

38.7%

$0

$20

$40

$60

$38.2

$56.1

Private

Out of pocket

Public and other

Percent Amount in billions

26.4%

48.3%

13.0%

Medicare Non-Medicare Medicare Non-Medicare

$6.3

$10.1

$21.8

$27.1

$7.3

$21.7

Outpatient prescription medicines

U.S. community population, 1999
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• In 1999, a little over half of all

Medicare beneficiaries had

Medicare and supplemental

private insurance (53%). Smaller

proportions had Medicare only

(33%) or Medicare and other

public insurance (14%). 

• Over three-quarters (77%) of the

non-Medicare population had

private insurance. An additional

10% had public insurance only

and the remaining 13% were

uninsured. 

Agency for Healthcare Research and Quality

13

Medical Expenditure Panel Survey

What is the insurance status of the

Medicare and non-Medicare populations?

0%

20%

40%

60%

80%

52.8%

33.2%

Insurance status

14.0%

0%

20%

40%

60%

80% 77.2%

12.6%

10.1%

Any private Public only Uninsured

Medicare Non-Medicare

Medicare +

any private

Medicare

only

Medicare +

other public

only

Outpatient prescription medicines

U.S. community population, 1999
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• In 1999, Medicare beneficiaries

who did not have supplemental

health insurance paid for nearly

three-quarters of their drug

expenses out of pocket. The outof-pocket share was smaller for

beneficiaries with any private

insurance (54%) or Medicare and

public insurance only (39%).

• Uninsured people paid for 89%

of their drug expenses out of

pocket. The out-of-pocket share

was smaller for people in the

non-Medicare population with

any private insurance (37%) or

public insurance only (27%).

Agency for Healthcare Research and Quality

14

Medical Expenditure Panel Survey

Does the out-of-pocket payment share

vary by insurance status?

0%

20%

40%

60%

80%

100%

54.1%

72.5%

Out-of-pocket share

39.4%

0%

20%

40%

60%

80%

100%

37.3%

89.2%

26.9%

Any private Public only Uninsured

Medicare Non-Medicare

Medicare +

any private

Medicare

only

Medicare +

other public

only

Outpatient prescription medicines

U.S. community population, 1999
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• Although prescription medicines

accounted for a little less than

16% of total health care expenses

in 1999, they accounted for

nearly two-fifths (38%) of all outof-pocket expenses.

• The share of all out-of-pocket

health spending that went for

prescription medicines was nearly

three-fifths (57%) for Medicare

beneficiaries but only 28% for the

non-Medicare population.

Agency for Healthcare Research and Quality

15

Medical Expenditure Panel Survey

Do out-of-pocket payments for prescription

medicines make up a large share of out-ofpocket payments for health care?

Out-of-pocket drug expenses as percent of total

out-of-pocket expenses for health care

Total

population

Medicare Non-Medicare

0%

20%

40%

60% 57.0%

38.0%

28.4%

Outpatient prescription medicines

U.S. community population, 1999
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• In 1999, the distribution of

expenses throughout the

population was similar for

prescription medicines and all

health care.

• For both types of expenses, the

10% of the population with the

highest spending accounted for

about two-thirds of the total, and

the top 30% accounted for 90%

or more of the total.

• The bottom 50% accounted for a

larger share of total health

expenses (3%) than of drug

expenses (0.6%).

Agency for Healthcare Research and Quality

16

Medical Expenditure Panel Survey

Is the distribution of expenses throughout

the population different for prescription

medicines than for total health care?

0%

20%

40%

60%

80%

100% 94.0%

66.5%

0.6%

0%

20%

40%

60%

80%

100%

89.6%

66.7%

3.1%

Top 10% Top 30% Bottom 50%

Concentration of drug expenses Concentration of total health care expenses

Outpatient prescription medicines

U.S. community population, 1999
Population

Subgroups

Use and expenses for

prescription drugs vary across

subgroups of the community

population for many reasons,

including differences in access and

differences in health status.

Appropriate health care policy

decisions regarding prescription

drugs require both an

understanding of how total and outof-pocket expenses vary across

subgroups of the community

population and information on the

extent to which drug expenses are

concentrated within certain

subgroups. This section presents

information on total expenses and

out-of-pocket expenses by age,

insurance status, health status, and

income. Results are presented for

the total population, Medicare

beneficiaries, and the non-Medicare

population.

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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17

section 2
• Medicare covers not only elderly

people but also certain younger

people with disabilities and

people with end-stage renal

disease (permanent kidney failure

with dialysis or a transplant,

sometimes called ESRD). In

1999, expenses for Medicare

beneficiaries were somewhat

concentrated in the non-elderly

age group. People under 65

made up 11% of total

beneficiaries but accounted for

16% of expenses.

• In the non-Medicare population,

prescription medicine expenses

were concentrated among people

in the older age groups.

Although people ages 45-64

made up only 24% of the nonMedicare population, they

accounted for 53% of prescription

expenses. People under 45 made

up 76% of the non-Medicare

population but accounted for

only about 47% of drug expenses.

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Agency for Healthcare Research and Quality

18

Medical Expenditure Panel Survey

Are prescription medicine expenses highly

concentrated in certain age groups?

Non-Medicare

Under 65 years

65-74 years

75-84 years

85 years and over

0%

20%

40%

60%

80%

100%

11.1% $56.1

Medicare

Percent of Medicare

beneficiaries

Percent of

expenses

32.1%

9.7%

47.1% 42.9%

8.2%

16.0%

32.9%

0%

20%

40%

60%

80%

100%

10.2%

2.1%

Percent of non-Medicare

population

Percent of

expenses

45.3%

14.7%

20.5%

36.7%

25.2%

7.9%

28.0%

9.3%

6-17 years

18-44 years

45-54 years

55-64 years

Under 6 years

Outpatient prescription medicines

U.S. community population, 1999
0%

20%

40%

60%

80%

100% Any private

Public only

Uninsured

Non-Medicare

0%

20%

40%

60%

80%

100%

33.2%

$56.1

Medicare

Percent of Medicare

beneficiaries

Percent of

expenses

14.0%

52.8% 54.8%

29.4%

15.9%

77.2% 80.2%

Percent of non-Medicare

population

Percent of

expenses

12.6%

10.1%

5.5%

14.3%

Outpatient prescription medicines

U.S. community population, 1999

Medicare only

Medicare + any private

Medicare + other

public only

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• In 1999, drug expenses were not

disproportionately concentrated

in any group of Medicare

beneficiaries classified by their

health insurance status.

• In the non-Medicare population,

drug expenses were more

concentrated among people with

public insurance, less

concentrated among the

uninsured, and about

proportionate for people with

private insurance

Agency for Healthcare Research and Quality

19

Medical Expenditure Panel Survey

Are prescription medicine expenses highly

concentrated among people with private

insurance?
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Agency for Healthcare Research and Quality

20

Medical Expenditure Panel Survey

Are prescription medicine expenses highly

concentrated among people in fair or poor

health?

20%

40%

60%

80%

100%

0%

Good

Fair

Poor

Excellent

Very good

Non-Medicare

17.8%

$56.1

Medicare

Percent of Medicare

beneficiaries

Percent of

expenses

15.5%

31.6%

Percent of non-Medicare

population

Percent of

expenses

Outpatient prescription medicines

U.S. community population, 1999

0%

20%

40%

60%

80%

100%

25.4%

8.4%

9.0%

21.1%

36.0%

18.9%

14.6%

43.9%

$56.1

1.2%

31.3%

4.0%

19.6%

19.3%

17.1%

27.5%

26.8%

9.3%

• In 1999, people in fair or poor

health represented 24% of the

Medicare population yet

accounted for 36% of total

prescription medicine expenses

for that population. In contrast,

those in very good or excellent

health made up 43% of the

Medicare population yet

accounted for only 28% of total

drug expenses.

• In the non-Medicare population,

people in fair or poor health

represented about 5% of the

population yet accounted for 26%

of total prescription medicine

expenses. Those in very good or

excellent health made up 75% of

the non-Medicare population but

accounted for only 46% of total

drug expenses.
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• In 1999, prescription medicine

spending was not

disproportionately concentrated

in any income group of Medicare

beneficiaries.

• Among the non-Medicare

population, prescription expenses

were not disproportionately

concentrated among the poor

but were disproportionately

concentrated in the highest

income group. 

Agency for Healthcare Research and Quality

21

Medical Expenditure Panel Survey

Are prescription medicine expenses highly

concentrated among lower income

groups?

0%

20%

40%

60%

80%

100%

20%

40%

60%

80%

100%

0%

Low income

Near poor

Poor

High income

Middle income

Non-Medicare

27.5%

$56.1

Medicare

Percent of Medicare

beneficiaries

Percent of

expenses

6.2%

20.7%

Percent of non-Medicare

population

Percent of

expenses

Outpatient prescription medicines

U.S. community population, 1999

33.4%

12.2%

25.1%

6.1%

19.9%

36.2%

12.7%

40.2%

$56.1

11.8%

30.8%

4.2%

13.0%

46.5%

2.8%

9.4%

27.1%

14.2%
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• In 1999, non-elderly beneficiaries

had the highest average

prescription expenses per user

($1,670) in the Medicare group.

• The out-of-pocket payment share

for prescription medicines per

user for Medicare beneficiaries

was highest for those age 85 and

over (71%) and next highest for

those ages 75-84 (60%).

• Average annual drug expenses

per user in the non-Medicare

population increased steadily with

age, from $85 for children under

6 to $829 for the 55-64 age

group. 

Agency for Healthcare Research and Quality

22

Medical Expenditure Panel Survey

Do per-user prescription medicine

expenses vary by age?

Under 65

 years

65-74

years

75-84

years

85 years

and over

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$491

$727

$445

Average third party

Average out of pocket

Medicare beneficiaries with expense

Outpatient prescription medicines

U.S. community population, 1999

$286

$540

$943

$677 $715

$49 $129

$203

Non-Medicare population with expense

$401

$138 $68

$241

$320

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Under 6

years

6-17

years

18-44

years

45-54

years

55-64

years

$509

Mean expenseMean expense

$35
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• In 1999, the average expense for

Medicare beneficiaries with an

expense ranged from $1,315 for

people with public insurance

coverage in addition to Medicare

to $1,024 for those with no

coverage except Medicare. 

• In the non-Medicare population,

prescription medicine users’

average expense was much

higher for people with only

public insurance coverage ($569)

than for people who had any

private insurance ($397) or were

uninsured ($275).

Agency for Healthcare Research and Quality

23

Medical Expenditure Panel Survey

How do prescription medicine expenses

per user vary by insurance status?

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$523

$281

$797

Average third party

Average out of pocket

Medicare beneficiaries with expense

Outpatient prescription medicines

U.S. community population, 1999

$618

$743

$518

$30

Non-Medicare population with expense

$249

$153

$245 $148

Mean e

$416

xpense

Mean expense

Medicare

only

Medicare +

any private

Medicare +

other public

only

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Any private Public only Uninsured
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• In 1999, average prescription

medicine expenses for people

with an expense increased as

health status worsened for both

the Medicare and non-Medicare

populations. 

• The share of per-user expenses

paid out of pocket did not

change with health status for

Medicare beneficiaries, remaining

stable at 54%-59%. However, for

the non-Medicare population,

the out-of-pocket share ranged

from 43% for people in excellent

health to 33% for those in fair

health.

Agency for Healthcare Research and Quality

24

Medical Expenditure Panel Survey

Is health status related to per-user

prescription medicine expenses?

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$655

$514

$825

Average third party

Average out of pocket

Medicare beneficiaries with expense

Outpatient prescription medicines

U.S. community population, 1999

$286

$732

$354

$784

$1,072

$196

$121

$305

Non-Medicare population with expense

$811

$187 $131

$405

$714

$1,215

Mean expenseMean expense

$358

$274

$482

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Excellent Very

good

Good Fair Poor

$92

Excellent Very

good

Good Fair Poor
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. . .

• In 1999, there were no

significant differences across

income groups in per-user

prescription medicine expenses

and out-of-pocket shares for

Medicare beneficiaries except

that the high-income group had

lower average expenses and a

lower out-of-pocket share than

the middle-income group.

• In the non-Medicare population,

people in the high-income group

and the poor group had the

highest average drug expenses.

People in the high-income group

had lower out-of-pocket shares

than the near-poor, low-income,

and middle-income groups.

Agency for Healthcare Research and Quality

25

Medical Expenditure Panel Survey

How are income and per-user prescription

medicine expenses related? 

$0

$200

$400

$600

$800

$1,000

$1,200

$451 $473

$519 Average third party

Average out of pocket

Medicare beneficiaries with expense

Outpatient prescription medicines

U.S. community population, 1999

$286 $644

$531

$643 $658

$214

$276

$175

Non-Medicare population with expense

$174

$149 $152 $143 $191

$332

Mean expenseMean expense

$489

$473

$738

High

income

Middle

income

Low

income

Near

poor

Poor

$155

$0

$200

$400

$600

$800

$1,000

$1,200

High

income

Middle

income

Low

income

Near

poor

Poor

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

27

Therapeutic

Classes of

Drugs 

Outpatient prescription

medicines help in a wide range of

situations, from management of

chronic conditions to treatment of

acute conditions. Therefore, a

complete picture of outpatient

prescription drug use requires

information on which types of drugs

are most commonly used by the

community population.

This section presents

information on the five therapeutic

classes of prescribed medicines (such

as cardiovascular agents, hormones,

and anti-infectives) that accounted

for the largest percent of expenses

for several population groups and

gives the percent of people using

them.

The population groups for

which data are presented are the

total population, elderly Medicare

beneficiaries, non-elderly Medicare

beneficiaries (under age 65), nonMedicare adults (18-64), and

children (under 18).

section 3
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. . .

• In 1999, of the $94.2 billion

spent for prescription drugs by

the community population, a

larger percent (20%) was spent

on cardiovascular agents than on

any other therapeutic class. The

other therapeutic classes in the

top 5 in expenses were

hormones, central nervous

system agents, psychotherapeutic

agents, and respiratory agents.

• Of the top-selling classes of

drugs, central nervous system

agents were used by the highest

percent of people (21%),

followed by hormones (19%),

respiratory agents (18%),

cardiovascular agents (16%), and

psychotherapeutic agents (10%).

Agency for Healthcare Research and Quality

28

Medical Expenditure Panel Survey

What are the top 5 therapeutic classes of

drugs for the community population?

Respiratory agents

Psychotherapeutic

agents

Central nervous

system agents

Hormones

Cardiovascular

agents

0%

10%

20%

30%

10.8%

Percent of drug expenses

14.3%

20.1%

10.2%

8.0%

Outpatient prescription medicines

U.S. community population, 1999

0%

10%

20%

30%

21.1%

Percent of population with expense

19.1%

15.6%

9.9%

17.8%
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• In 1999, of the $32.1 billion

spent on prescription drugs by

the 34.3 million elderly (65 and

over) Medicare beneficiaries, a

larger percent (32%) was spent on

cardiovascular agents than on any

other therapeutic class. The

other therapeutic classes in the

top 5 in expenses were

hormones, anti-hyperlipidemic

(cholesterol-lowering) agents,

central nervous system agents,

and gastrointestinal agents. 

• Of the top-selling classes of

drugs, cardiovascular agents were

purchased by the highest

percentage of people (59%),

followed by hormones (40%),

central nervous system agents

(34%), anti-hyperlipidemic agents

(20%), and gastrointestinal agents

(20%).

Agency for Healthcare Research and Quality

29

Medical Expenditure Panel Survey

What are the top 5 therapeutic classes of

prescribed medicines for elderly Medicare

beneficiaries?

0%

10%

20%

30%

40%

50%

60%

10.6%

Percent of drug expenses

12.7%

32.4%

8.2% 7.7%

Outpatient prescription medicines

U.S. community population, 1999

0%

10%

20%

30%

40%

50%

60%

20.4%

Percent of population with expense

40.2%

58.8%

33.8%

Gastrointestinal 20.0%

agents

Central nervous

system agents

Anti-hyperlipidemic

agents

Hormones

Cardiovascular

agents
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Agency for Healthcare Research and Quality

30

Medical Expenditure Panel Survey

What are the top 5 therapeutic classes of

drugs for non-elderly Medicare beneficiaries?

• In 1999, of the $6.1 billion spent

on prescription drugs by the 4.3

million non-elderly (under age

65) Medicare beneficiaries, there

was no significant difference in

the percents spent on

psychotherapeutic agents, central

nervous system agents, and

cardiovascular agents. These

were the top 3 classes of drugs

for which reliable estimates could

be made. 

• Over one-half (52%) of all nonelderly Medicare beneficiaries

used central nervous system

agents. This was a larger percent

than for any of the other topselling therapeutic classes of

drugs for which reliable estimates

could be made.

Central nervous

system agents

Psychotherapeutic

agents

Immunologic

agents*

0%

10%

20%

30%

40%

50%

60%

14.4%

Percent of drug expenses

16.7%

*

13.1%

8.5%

Outpatient prescription medicines

U.S. community population, 1999

0%

10%

20%

30%

40%

50%

60%

52.1%

Percent of population with expense

34.3%

38.1%

Gastrointestinal 21.5%

agents

Cardiovascular

agents

* Reliable estimates cannot be produced because relative standard error is too large.

*

* Reliable estimates cannot be produced because relative standard error is too large.
• In 1999, of the $50.4 billion

spent on prescription drugs by

the 164.9 million persons in the

non-Medicare adult population

(18-64 years), a larger percent

(17%) was spent on hormones

than on any other therapeutic

class. The next 4 top-selling

classes of drugs, in order, were

cardiovascular agents,

psychotherapeutic agents, central

nervous system agents, and

respiratory agents. 

• Nearly one-quarter (23%) of the

adult non-Medicare population

used central nervous system

agents. This was a higher

percent than for any of the other

top-selling therapeutic classes of

drugs for this population. 

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Agency for Healthcare Research and Quality

31

Medical Expenditure Panel Survey

What are the top 5 therapeutic classes of

prescribed medicines for the non-Medicare

adult population?

Psychotherapeutic

agents

Cardiovascular

agents

Hormones

0%

10%

20%

30%

12.6%

Percent of drug expenses

15.2%

12.3%

8.9%

Outpatient prescription medicines

U.S. community population, 1999

0%

10%

20%

30%

9.9%

Percent of population with expense

12.6%

23.4%

17.4%

Respiratory

agents

Central nervous

system agents

17.2%

20.7%
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. . .

• In 1999, of the $5.6 billion

spent on prescription drugs by

the 72.9 million children under

18, respiratory agents (23%) and

anti-infectives (18%) accounted

for the highest percentages of

total expenses. 

• Nearly 3 out of 10 children in

this population (28%) used antiinfective drugs, a higher percent

than for any of the other topselling therapeutic classes of

drugs for this population.

Agency for Healthcare Research and Quality

32

Medical Expenditure Panel Survey

What are the top 5 therapeutic categories

of prescribed medicines for children?

Psychotherapeutic

agents

Anti-infectives

Respiratory

agents

0%

10%

20%

30%

13.5%

Percent of drug expenses

17.8%

12.5%

Outpatient prescription medicines

U.S. community population, 1999

0%

10%

20%

30%

4.2%

Percent of population with expense

28.1%

17.6%

Miscellaneous

agents*

Topical agents

22.6%

17.0%

*

* Reliable estimates cannot be produced because relative standard error is too large.

*

* Reliable estimates cannot be produced because relative standard error is too large.
Berk ML, Monheit AC. The concentration

of health care expenditures, revisited.

Health Aff March/April 2001; 20(2):9-

18. 

Cohen J. Design and methods of the

Medical Expenditure Panel Survey

Household Component. Rockville

(MD): Agency for Health Care Policy

and Research; 1997. MEPS

Methodology Report No. 1. AHCPR

Pub. No. 97-0026. 

Cohen S. Sample design of the 1996

Medical Expenditure Panel Survey

Household Component. Rockville

(MD): Agency for Health Care Policy

and Research; 1997. MEPS

Methodology Report No. 2. AHCPR

Pub. No. 97-0027.

Moeller JF, Stagnitti MN, Horan E, et al.

Outpatient prescription drugs: data

collection and editing in the 1996

Medical Expenditure Survey (HC010A). Rockville (MD): Agency for

Healthcare Research and Quality; 2001.

MEPS Methodology Report No. 12.

AHRQ Pub. No. 01-0002.

1999 Medical Expenditure Panel

Survey–Table Compendium. Rockville

(MD): Agency for Healthcare Research

and Quality; 2003. Available at:

http://www.meps.ahrq.gov/

compendiumtables/tc_toc.htm.

1999 Medical Expenditure Panel Survey

Prescribed Medicines File: MEPS HC033A. Rockville (MD): Agency for

Healthcare Research and Quality; 2002.

Available at: http://meps.ahrq.gov/

puf/pufdetail.asp?id=91.

Medical Expenditure Panel Survey Agency for Healthcare Research and Quality

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33

references

Please consult the MEPS Web site at http://www.meps.ahrq.gov/ for an

updated publications list and other information from MEPS. For additional

information, contact the MEPS Project Director at mepspd@ahrq.gov.
Outpatient Prescription Medicines

This category covers expenses for all

outpatient prescription medications that

the household or individual purchased or

refilled from a pharmacy provider not in an

inpatient setting. It includes expenses for

insulin and diabetic supplies and

equipment. It does not include over-thecounter medicines.

Source of Payment

The percents of sources of payment shown

here represent the share of total expenses

(summed across all persons) paid for by

each payment source. Sources of payment

are classified as follows:

Out-of-pocket—This category includes

payments by user or family.

Private insurance—Private insurance

includes payments made by major medical

insurance plans covering hospital and

medical care (excluding payments from

Medicare, Medicaid, and other public

sources). Payments from Medigap plans

for Medicare beneficiaries, CHAMPUS

(the military health care system now called

TRICARE), and CHAMPVA (for military

veterans) are included. Payments from

plans that provide coverage for a single

service only, such as dental or vision

coverage, are not included.

Public insurance—Public insurance

includes Medicare; Medicaid; Department

of Veterans Affairs (excluding

CHAMPUS/CHAMPVA); other Federal

sources (Indian Health Service, military

treatment facilities, and other care

provided by the Federal Government);

various State and local sources (community

and neighborhood clinics, State and local

health departments, and State programs

other than Medicaid); Medicaid payments

reported for persons who were not

enrolled in the Medicaid program at any

time during the year; and other public

sources of payment.

Other—This category includes Workers’

Compensation; unclassified sources

(automobile, homeowner’s, or liability

insurance and other miscellaneous or

unknown sources); and any type of private

insurance payments reported for people

without private health insurance coverage

during the year. 

Population Characteristics 

In general, population characteristics were

measured as of December 31, 1999, or the

last date that the sample person was part of

the civilian noninstitutionalized population

living in the United States prior to

December 31, 1999. Subgroups within

this population are defined here.

Medicare beneficiary/non-Medicare

population—People are considered

Medicare beneficiaries if they were covered

by Medicare for at least half of the months

they were in the survey. For analytic

purposes, this classification also includes a

very small number of persons age 65 and

over who did not report Medicare

coverage. All others are considered

members of the non-Medicare population. 

Medical Expenditure Panel Survey

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definitions of terms

Agency for Healthcare Research and Quality

34
Elderly/non-elderly—People are considered

elderly if they were 65 or over. All others

are considered non-elderly. 

Adult/child—People are considered adults if

they were 18 or over. Those under age 18

are considered children.

Health Insurance Status

Individuals under age 65 were classified into

the following three insurance categories:

Any private health insurance— Individuals

with insurance that provides coverage for

hospital and physician care at any time

during the year, other than Medicare,

Medicaid, or other public

hospital/physician coverage, are classified as

having private insurance. Medigap coverage

is included in this category. Persons with

Armed-Forces-related coverage—

CHAMPUS/CHAMPVA (currently called

TRICARE)—are also included. Insurance

that provides coverage for a single service

only, such as dental or vision, is not

included.

Public coverage only—Individuals are

considered to have public coverage only if

they met both of the following criteria: 

• They were not covered by private

insurance at any time during the year.

• They were covered by one of the

following public programs at any point

during the year: Medicare, Medicaid, or

other public hospital/physician

coverage.

Uninsured—The uninsured are defined as

persons not covered by Medicare,

CHAMPUS/CHAMPVA, Medicaid, other

public hospital/physician programs, or

private hospital/physician insurance at any

time during 1999. Individuals covered only

by noncomprehensive State-specific

programs (e.g., Maryland Kidney Disease

Program, Colorado Child Health Plan) or

private single-service plans (e.g., coverage

for dental or vision care only, coverage for

accidents or specific diseases) are not

considered to be insured. 

Individuals age 65 and over were classified

into the following three insurance

categories: 

Medicare and private insurance—This

category includes persons classified as

Medicare beneficiaries and covered by

Medicare and a supplementary private

policy.

Medicare and other public insurance—This

category includes persons classified as

Medicare beneficiaries who met both of the

following criteria:

• They were not covered by private

insurance at any time during the year.

• They were covered by one of the

following public programs at any point

during the year: Medicaid, other public

hospital/physician coverage.

Medicare only—This category includes

persons classified as Medicare beneficiaries

but not classified as Medicare and private

insurance or as Medicare and other public

insurance.

Income

Each person was classified according to the

total 1999 income of his or her family.

Within a household, all individuals related

by blood, marriage, or adoption were

considered to be a family. Personal income

from all family members was summed to

create family income. Possible sources of

income included annual earnings from

wages, salaries, bonuses, tips, and

commissions; business and farm gains and

losses; unemployment and Worker’s

Compensation; interest and dividends;

alimony, child support, and other private

cash transfers; private pensions, IRA

withdrawals, Social Security, and veterans’

payments; Supplemental Security Income

and cash welfare payments from public

assistance, Aid to Families with Dependent

Children, and Aid to Dependent Children;

gains or losses from estates, trusts,

partnerships, S corporations, rent, and

royalties; and a small amount of other

income.

Poverty status is the ratio of family income

to the 1999 Federal poverty thresholds,

which vary by family size and age of the

head of the family. Those categories are:

Poor—Persons in families with income less

than or equal to 100% of the poverty line

are considered poor. (Some of these persons

are in families reporting negative income.)

Agency for Healthcare Research and Quality

35

Medical Expenditure Panel Survey
Agency for Healthcare Research and Quality

36

Medical Expenditure Panel Survey

Near poor—Persons in families with income

over 100% through 125% of the poverty

line are considered near poor.

Low income—Persons in families with

income over 125% through 200% of the

poverty line are considered low income.

Middle income—Persons in families with

income over 200% through 400% of the

poverty line are considered middle income

High income—Persons in families with

income over 400% of the poverty line are

considered high income.

Perceived Health Status

The MEPS respondent was asked to rate

the health of each person in the family

according to the following categories:

excellent, very good, good, fair, and poor.

Therapeutic Classifications

Each drug that was listed as purchased or

otherwise obtained in the MEPS Prescribed

Medicines (PMED) File HC-033A was

assigned to a major therapeutic class by

linking the PMED file to the Multum

Lexicon database, a product of Cerner

Multum, Inc. The Multum therapeutic

classification system is designed to replicate

the type of organizational schemes used in

practice by physicians and pharmacists. It is

important to note that the assigned

therapeutic class for a particular drug

purchase in MEPS will not always

correspond to the reported condition for

the drug. Also, a small percent of drug

purchases were assigned to more than one

major therapeutic class. These drugs were

assigned to a single therapeutic class using a

combination of condition information and

random assignment. 

www.ahrq.gov

AHRQ Publication No. 04-0001

October 2003

ISBN 1-58763-136-9

ISSN 1531-5649

U.S. Department of Health and Human Services

Public Health Service

Agency for Healthcare Research and Quality

540 Gaither Road

Rockville, MD 20850