Quantifying the Magnitude and Composition of Out-of-Pocket Expenditure on Medicines in India2014 to 2017-18: A Repeated Cross-Sectional Analysis

Abstract

Introduction: More than 60% of healthcare expenditure by households in India is paid as out-of-pocket expenditure and expenditure on medicines is the single largest component of these payments. Increasing longevity and rising incidence of chronic conditions is expected to further increase the utilization of medicines and aggravate the associated financial burden. Objectives: This paper quantifies the magnitude of out-of-pocket expenditure on medicines and changes there in, between 2014 and 2017-18. The paper looks at the expenditure across, states, types of providers and ailments. Method: Repeated cross-sectional analysis using two rounds of health surveys by National Sample Survey Organization has been used. Results: The mean out-of-pocket expenditure on medicines per episode fell from ₹ 4386 to ₹ 3857 for inpatient care and from ₹ 459 to ₹ 418, in constant prices, for outpatient care. Despite the decline in the magnitude of expenditure, its share in total out-of-pocket expenditure has remained high at 49%. The out-of-pocket expenditure on medicines for private provider was higher than that for public provider. Medication for cancer and tuberculosis have the highest expenditure and show an upward trend. A high percentage of people incur out-of-pocket expenditure on medicines for fever, respiratory and musculo-skeletal diseases. The percentage of people incurring expenditure on medication for cardio-vascular diseases and diabetes has increased. Conclusion: The mean out-of-pocket expenditure on medicines per episode has fallen, yet the expenditure remains high. People rely on utilization of medicines at private providers and pharmacies. Supply side and demand side policies needed to further reduce out-of-pocket expenditure on medicines.