Statistical comparison of consumer drug expenditures and discretionary purchases to assess drug affordability.
BACKGROUND
Affordability may be defined as the absence of economic barriers to a good or service. There are 2 frequently observed measures of affordability: a consumer's ability to pay and his or her physical access to a good or service. Thus, most programs designed to subsidize consumers' health care costs, especially state programs that address prescription drug expenditures for people aged > or =65 years, base eligibility on measures of income as a proxy for a consumer's ability to pay. These measures do not explicitly include a consumer's willingness to pay for medications. For example, it is possible that some Medicare beneficiaries may be resistant to paying for medication because other major health care expenditures are typically covered by insurance. This resistance could be exacerbated by the keen awareness among the general population of the rising costs of medications. Because medications are considered a necessity, expenditure levels are usually compared with expenditures for other necessities, such as housing and medical services.


OBJECTIVE
In an attempt to assess consumers' potential willingness to pay for medications, this article draws on data from the US Bureau of Labor Statistics' Consumer Expenditure Surveys to compare pharmaceutical expenditures with out-of-pocket expenditures for discretionary purchases, such as dining outside the home.


RESULTS
Personal out-of-pocket expenditures for medications have ranged from 0.8% to 1.0% of consumer unit income since 1985. These expenditures are relatively small compared with those for necessities, such as housing (33%) and food (13.5%). They are also less than the share of income dedicated to many nonessentials.


CONCLUSIONS
Assessing inability versus unwillingness to pay for medication remains a problem for both researchers and health care policy makers attempting to determine the affordability of medications.
Center for Medication Use, Policy & Economics, University of Michigan, Ann Arbor 48109-1065, USA.
James A
JA
Lee
Patrick L
PL
McKercher
D000368:Aged; D017850:Economics, Pharmaceutical; D005382:Financing, Personal; D006801:Humans; D007182:Income; D008489:Medical Indigency / Q000191:economics*; D011306:Prescription Fees / Q000706:statistics & numerical data* / Q000639:trends