Investor Presentaiton
P
rescription drug spending has been a significant driver of overall spending
growth in Rhode Island and across the United States. OHIC's analysis of Cost
Pharmacy amounted to $1,223, representing 15 percent of TME (see Exhibit 2.4).
To further explore statewide trends in Retail Pharmacy spending, OHIC analyzed
claims data from 2017 through 2021 that are available through the Rhode Island
All-Payer Claims Database (APCD), Health Facts RI. This chapter presents the results
of these analyses.
Drivers of Per Capita Spending Growth on
Prescription Drugs
From 2017 to 2021, spending on prescription drugs for those with commercial
insurance, Medicaid, and Medicare coverage in Rhode Island increased an average of
4.4 percent annually, from $120 per member per month (PMPM) to $142 PMPM. This
growth was fueled by spending on brand name drugs. Between 2017 and 2021, PMPM
spending on brand name drugs grew by 28 percent. By comparison, PMPM spending
on generic drugs decreased 9 percent over the same time frame (see Table 3.1). In
2021, brand-name drugs represented only 12 percent of all drugs dispensed, but
account for 81 percent of drug spending (see Exhibit 3.1).
Table 3.1: Per Member Per Month Spending on Retail Pharmacy for
Rhode Island Residents with Commercial Insurance, Medicaid, or
Medicare Advantage Coverage
2017
All Drugs
$120
Brand Drugs
Generic Drugs
$90
$30
2018
$129
$99
$31
2019
$129 18.7%
$100 27.8%
$29 -9.2%
2020
$139
$109
$29
2021
$142
$116
$27
Average Annual Growth
4.4%
6.4%
-2.3%
Source: OHIC analysis of HealthFacts RI data. Medicare fee-for-service data are excluded.
Exhbit 3.1: 2021 Utilization and Spending on Brand and Generic Drugs for Rhode Island
Residents with Commercial Insurance, Medicare, or Medicare Advantage Coverage
Share of Utilization
Brand, 12%
Share of Total Spending
Generic, 19%
Generic, 88%
Brand, 81%
Source: OHIC analysis of HealthFacts RI data. Medicare fee-for-service data are excluded. Units are defined as 30-day equivalent prescriptions.
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Annual Report: Health Care Spending and Quality in Rhode IslandView entire presentation