Changing Prescription Drug Sector: New Expenditure Methodologies

Estimating spending for prescription drugs has become increasingly difficult over the past 15 years as extensive changes have taken place within the retail prescription drug industry. Expenditures for prescription drugs in retail outlets grew rapidly during the 1980s and early 1990s. New retail outlets emerged and existing sites lost market share. New mechanisms for reimbursing drug purchases led to the flow of rebates between manufacturers and insurers, bypassing retailers. These and other major industry changes required the development of new estimating methodologies for tracking prescription drug expenditures within the National Health Accounts (NHA).