Expert Commentary

Prescription opioid drugs: What they cost and who pays

A study in Health Affairs suggests spending for prescription opioids tripled from 1999 to 2012 and that Medicare and Medicaid covered a growing portion of those costs.


The issue: More people in the United States died from drug overdoses in 2014 than any other year in recorded history – and 61 percent of those deaths involved opioids, according to a 2016 report from the U.S. Centers for Disease Control and Prevention (CDC). Opioids such as oxycodone, hydrocodone and fentanyl are generally prescribed to treat pain. Heroin is an illegal opioid.

The country is in the midst of an overdose epidemic, driven largely by prescription and illicit opioids. The problem is especially troubling in Kentucky, New Hampshire, New Mexico, Ohio and West Virginia — the five states with the highest rates of death due to overdose. In August 2016, news organizations nationwide focused on Huntington, West Virginia after 27 people there overdosed on opioids in less than four hours, occupying every ambulance in the city. The following month, the city of East Liverpool in Ohio posted on Facebook graphic photos of a couple who had apparently overdosed on opioids in a car while a small child sat in a back seat. City officials said they released the images, which went viral, to “convince another user to think twice about injecting this poison while having a child in their custody.”

In 2016, President Obama proclaimed Sept. 18 through Sept. 24 as Prescription Opioid and Heroin Epidemic Awareness Week.

A study worth reading: “Payments For Opioids Shifted Substantially To Public And Private Insurers While Consumer Spending Declined, 1999–2012,” published in Health Affairs, 2016.

Study summary: Chao Zhou, an economist at the CDC’s National Center for Injury Prevention and Control, and her colleagues wanted to know how much is spent on prescription opioids and who pays for them – individuals or their public or private insurers. The authors contend that knowing such information might help identify ways to prevent drug overdoses. They used data from 1999 to 2012 from the Medical Expenditure Panel Survey, a federal government resource, to examine trends in prescribing and expenditures and investigate the impact that changes in insurance coverage might have had over that time.

Key takeaways:

  • Spending for prescription opioids more than tripled between 1999 and 2012 — from $2.3 billion to $7.4 billion.
  • In 1999, individuals paid out of pocket most of the cost of their opioid prescriptions. But their share of the cost dropped from 53 percent in 1999 to 18 percent in 2012, as insurance providers began covering the majority of the cost.
  • Medicare and Medicaid pay a significantly larger share of expenses for opioid pain relievers. In 1999, 9 percent of all of the money spent on prescription opioid drugs came from either Medicare or Medicaid. By 2012, that share had grown to 35 percent.
  • Medicare paid more for opioids than did Medicaid or private insurance. Medicare spent $328 per person annually, on average, for these drugs. Medicaid and private insurance spent an average of $139 and $209 per person annually, respectively.
  • The amount of opioids prescribed almost doubled from 2006 to 2012 while the amount of money spent on them during that period did not change much. The trend “suggests that there has been a shift toward less expensive drugs but not toward weaker ones.”

Helpful resources:

  • The CDC offers a variety of information about prescription opioids and heroin, including side effects, risk factors and state-level data on overdose deaths.
  • The National Institute on Drug Abuse has an explainer on understanding drug use and addiction.
  • The U.S. Centers for Medicare and Medicaid Services has created an interactive mapping tool that allows journalists to compare Medicare Part D opioid prescription claims in different areas of the country.

More research on this topic:


Keywords: health spending, pharmaceuticals, mental health, mental illness, insurance coverage, OxyContin, Vicodin, methadone

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