Trends in annual drug expenditure - a 16 year perspective of a public healthcare maintenance organization

Background: Modern drug therapy accounts for a major share of health expenditure and challenges public provider resources. The objective of our study was to compare drug expenditure trends for ten major drug classes over 16 years at Maccabi Healthcare Services (MHS), the 2^nd largest healthcare organization in Israel. Methods: A retrospective analysis of drug expenditure per HMO beneficiary between the years 1998-2014. Trends in annual mean drug expenditures per MHS member were compared among 10 major drug classes. Results: Average annual drug expenditure per beneficiary increased during the study period from 429.56 to 474.32 in 2014 (10.4 %). Ten drug classes accounted for 58.0 % and 77.8 % of total drug cost in 1998 and 2014, respectively. The overall distribution of drug expenditure among drug classes differed significantly between 1998 and 2014 (p<0.001), mainly due to the increase in expenditure for cancer drugs, from 6.8 % of total drug cost to 30.3 %. In contrast, expenditures for cardiovascular drugs decreased during the same period from 16.0 to 2.7 %. Moreover, the median annual increase in net drug costs per HMO member during 1998-2014 was largest for cancer drugs (NIS 6.18/year; IQR, 1.70-9.92/year), about two-fold that of immunosuppressants, the second fastest growing drug class (NIS 2.81; IQR, 0.58-7.43/year). Conclusions: The continuous rise in anti-cancer drug expenditure puts a substantial burden on the medication budgets of public health organizations. Coordinated measures involving policy makers, physicians, and pharmaceutical companies will be required for efficient cost containment.