Social Sciences, Economics and Business, Economics, Samhällsvetenskap, Ekonomi och näringsliv, Nationalekonomi, Medical and Health Sciences, Basic Medicine, Pharmacology and Toxicology, Medicin och hälsovetenskap, Medicinska och farmaceutiska grundvetenskaper, Farmakologi och toxikologi

BACKGROUND: Pharmaceutical expenditures (PE) are increasing worldwide raising concerns about sustainability. However, the current price index provides an incomplete picture of this trend due to the rapid introduction of new drugs on the market. OBJECTIVE: The aim of this study is to decompose PE into their components and investigate the development in Sweden from 1990 to 2022. METHODS: The PE index was broken down into separate indices for price, quantity, and a residual. The residual reflects changes in expenditure driven by shifts in drug treatment patterns. RESULTS: PE increased by 227% during the study period. The decomposition showed that this increase was mainly driven by the residual (215%). Drug quantity increased by 105%, while the relative prices decreased by 50%. When dividing the whole study period into three 11-year-subperiods, the increase in real drug expenditure, drug quantity, and the residual was the highest from 1990 to 2000. CONCLUSIONS: The finding that the residual is the main driverindicates that the increase in PE is due to the introduction of and shift to more expensive pharmaceutical treatments, while existing treatments tend to become cheaper. Further research is needed to determine whether newer, more expensive drugs are indeed worth the extra cost.