Collected by the Galen Institute Advocates of government price controls on prescription drugs use misleading statistics to paint a false picture of drug prices in the United States. While overall spending on drugs is rising, the main reason is that millions of Americans are relying more on new and better treatments that did not exist even a few years ago. The Difference Between Drug Expenditures And Drug Prices Drug expenditures represent the total amount Americans spend on drugs.
Drug prices represent the actual amount charged to consumers.
While drug expenditures have been rising quickly, drug prices have increased only slightly faster than the overall inflation rate. In 1997, U.S. expenditures on pharmaceuticals increased by 14.2 percent. Of this increase, only 2.5 percent was due to price increases. Increased volume accounted for 6.7 percent of the increase, while the introduction of new drug therapies accounted for 5 percent of the increase. In 1998, U.S. expenditures on pharmaceuticals increased by 15.7 percent.