--- title: Americans Spent $100 Billion on Prescription Drugs in 2024. Why This Year Could Be Worse description: Americans spent a record $98B on prescriptions in 2024, despite new drug price caps and Medicare reforms aimed at lowering costs. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Economy and Politics - Banking - Career Advice - Credit - Credit Cards - Debt - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes published: '2025-05-08T19:07:10.000Z' modified: '2025-05-12T16:49:28.000Z' section: Economy and Politics tags: - News word_count: 926 canonical: https://money.com/prescription-drug-costs-record-high/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo Collage of a money bill folded into a dollar sign, with pills on top](https://img.money.com/2025/05/News-Drugs-Cost-May-Rise.jpg) Despite new rules aimed at curbing the cost of medication, Americans are spending more than ever on their prescriptions. Last year, out-of-pocket costs for prescription drugs notched a fresh high of $98 billion, according to a [recent report](https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/understanding-the-use-of-medicines-in-the-us-2025/iqvia-institute-iqi-us-use-of-medicines-04-25-forweb.pdf) from health data analytics firm IQVIA. Over the previous five years, out-of-pocket costs grew 25%. From 2023, expenses jumped by $6 billion, or 6.5%. The firm said that a growing number of prescriptions now cost $0 at checkout. Even so, Americans are spending more on the whole due to an increase in prescription drug use paired with an uptick in expenses on costly medications for cancer and weight loss in particular. ## Staying healthy has never been more important ### Protect yourself and your loved ones with a comprehensive and affordable health insurance plan. Click your state to learn more. [View Rates](https://money.com/pr/d83a3e2738f7?ap_referrer=%2Fprescription-drug-costs-record-high%2F) The surge in out-of-pocket spending is also due to a disproportionate increase in the cost of prescription drugs administered outside the retail pharmacy setting, such as at hospitals or [long-term care](https://money.com/when-to-buy-long-term-care-insurance/) facilities. For so-called non-retail drugs, Americans spent $29 billion in 2024, marking a five-year increase of 53%. Overall, 93% of prescriptions cost $19.99 or less out of pocket, the firm found, with an average price of $9.82. Generic drugs were significantly cheaper than brand-name drugs, at $6.95 per prescription, compared to $28.69. This record spending is despite new rules that have recently gone into effect to curb drug prices. As part of the [Inflation Reduction Act](https://money.com/inflation-reduction-act-save-you-money/), or IRA, signed into law by former President Joe Biden, out-of-pocket insulin costs were capped at $35 per month for Medicare beneficiaries starting in 2023. And in 2024, additional provisions went into effect that capped prescription drug expenses for certain people enrolled in Medicare’s drug program, known as Part D. Once they hit the “catastrophic coverage phase,” a threshold typically between [$3,300 and $3,800](https://www.cms.gov/files/document/lower-out-pocket-drug-costs-2024-and-2025-article.pdf) of out-of-pocket spending, the cap kicked in. ## America’s struggle to afford medication Starting this year, the out-of-pocket max for Part D is much lower and simpler: $2,000 across the board. Biden’s IRA also gave Medicare the power to negotiate drug prices directly with pharmaceutical companies. The first round of discounted drugs goes into effect in 2026. A [sweeping executive order](https://www.whitehouse.gov/presidential-actions/2025/04/lowering-drug-prices-by-once-again-putting-americans-first/) from President Donald Trump in April aims to build on the drug negotiation program while encouraging the production of cheaper, generic equivalents of high-cost, name-brand medications, among other initiatives to lower the cost of prescriptions for Americans. Then on Monday, Trump signed another order directing the Department of Health & Human Services to begin negotiating with pharmaceutical companies in an effort to get them to start charging Americans the same low price as the "most favored nation" abroad. Often, Americans pay much higher prices than residents of other countries for the exact same drug from the same manufacturer. Trump suggested that his drug price order — which didn't include specifics on a timeline for the negotiations or the drugs involved — will be used in tandem with tariffs to strike new trade deals. For many, the relief can’t come fast enough. Over 60% of adults currently take prescription medication, according to a [survey](https://www.kff.org/health-costs/poll-finding/public-opinion-on-prescription-drugs-and-their-prices/) by the nonprofit health research group Kaiser Family Foundation, with the most common number of prescriptions per person being four or more. About 3 in 10 respondents who take prescription drugs said they have difficulty affording them, and the difficulty increases the more drugs the person is prescribed. A similar share said they didn’t take their medication as prescribed at some point in the past year because of the cost. Instead, many survey respondents didn't fill the prescription, took an over-the-counter drug, skipped doses or halved pills, or a combination of those risky cost-cutting options. According to the IQVIA report, 96 million new prescriptions in 2024 were abandoned. The more expensive a prescription, the likelier it was to go unfilled. ## A drug price feedback loop Net spending on prescription drugs, which includes the portion covered by Medicare, Medicaid and private insurance companies, is also exploding — up 11.4% in 2024 to $487 billion, according to IQVIA. The firm estimates that total spending will reach $603 billion by 2029. Zooming out, the spending spree has broader implications for how much Americans end up spending on health care. While it may sound good that insurers — not just consumers — are spending more on prescription drugs, it could lead to more expensive insurance plans overall. Recent surveys from consulting firms Willis Towers Watson and Mercer found that the cost of [workplace health plans is expected to increase](https://money.com/workplace-health-insurance-costs-2025/) between 5.8% and 7.7% in 2025. Employers specifically cited increased costs for weight-loss medications like Ozempic and specialty cancer drugs as major factors. What's more, these estimations could be conservative, given they were published in the fall — before Trump imposed widespread tariffs. On May 5, Trump signaled that pharmaceutical imports are next, signing an executive order that directs the Food and Drug Administration to impose higher inspection fees for foreign drugmakers. Trump told reporters that more specifics on a pharmaceutical tariff rate are coming later this month. According to [Reuters](https://www.reuters.com/business/healthcare-pharmaceuticals/us-pharma-tariffs-would-raise-us-drug-costs-by-51-bln-annually-report-finds-2025-04-25/), a study commissioned by a drug lobbying group found that a 25% tariff on pharmaceuticals, which are normally exempt from tariffs, would increase drug costs in the U.S. by $51 billion annually, boosting drug prices by nearly 13% if passed on to consumers. In other words, not only could tariffs increase the out-of-pocket drug costs for consumers directly, but the additional expenses for insurers would exacerbate the reason why insurance premiums are already slated to skyrocket in 2025. ## Protect yourself and your family with a quality Health Insurance plan — Sign up for yours today ### Get more information now by clicking below. [View Rates](https://money.com/pr/zde518915a6d?ap_referrer=%2Fprescription-drug-costs-record-high%2F) ![](https://s3.consumersadvocate.org/prd/image/image/37668/medium_fdc4868b-7284-4f34-894e-d1f7f503c688.webp) Secure your future with comprehensive Health Insurance today! [View Rates](https://money.com/pr/z3fd4391435d?ap_referrer=%2Fprescription-drug-costs-record-high%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/prescription-drug-costs-record-high/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Health Care", "item": "https://money.com/health-care/" }, { "@type": "ListItem", "position": 4, "name": "Americans Spent $100 Billion on Prescription Drugs in 2024. 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