Drug spending in OECD countries rises by nearly a third since 1998

Spending on pharmaceuticals across OECD countries increased by an average of 32% in real terms since 1998, reaching more than US$450bn in 2003, according to new data released by the OECD.

Growth in drug spending has outpaced total health expenditure over the past five years in most OECD countries, the organisation said, and grew more than twice as fast as total health expenditure in the US and Australia between 1998 and 2003. The rate of growth was more moderate in Japan, Italy and Switzerland.

Spending on drugs represented on average around 18% of total health spending in OECD countries in 2003, ranging from almost 30% in the Slovak Republic, Korea and Hungary to around 10% in Denmark and Norway.

Total drug expenditure per person in the same year was highest in the US at more than $700 per person, followed by France (just over $600), Canada and Italy (about $500); the lowest spending of just over $100 was in Mexico and Turkey. However, these variations reflect differences in income levels, prices and consumption, as well as the pace of introduction of new and often more expensive drugs.

Significant variations in spending levels exist also in terms of total health spending. In 2003, the US spent $5,635 per person on health, more than twice the OECD average and around 10 times more than the lowest-spending countries, Mexico and Turkey. The US devoted 15% of its GDP to health spending in 2003, followed by Switzerland and Ger-many, at over 11% of GDP. At the other end of the scale, Korea and the Slovak Republic allocated a little under 6% of their GDP to health . The OECD average in 2003 was 8.6%.