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According to a 2019 poll, 24 percent of people taking prescription drugs said that it was difficult to afford their medications. The average American spends $1,200 on prescription drugs each year—more than any other country in the world.

Unfortunately, this prescription drug spending is only expected to increase. The Centers for Medicare and Medicaid Services (CMS) projects that prescription drug spending will increase by 6.1 percent each year through 2027.

Why are prescription drug costs so high in the United States? Specialty pharmaceuticals and oncology treatments have contributed in part to rising drug costs. Targeted, experimental drugs like these require a tremendous amount of research and testing to develop. Because of the resource-intensive development process, these drugs often come with a high price tag.

Some of these costly specialty drugs include immunosuppressive therapies like Humira or Stelara. Both are biologic drugs intended to treat autoimmune diseases like plaque psoriasis or arthritis. Insulin brands like Humalog and Novolog are also among the top 20 drugs by total charges.

High drug prices are largely dictated by the pharmaceutical supply chain. This supply chain contains three key players:

  • Drug manufacturers
  • Pharmacy benefit managers, and
  • Payers

How can healthcare organizations use drug cost data?

Drug cost data can be helpful for certain healthcare organizations interested in the pharmaceutical market.

For instance, medical suppliers may use this data to target regions with high drug costs. This allows medical supply companies to identify new sales opportunities and sell lower-cost drug alternatives, if available.

Pharmaceutical companies may also use drug cost data when developing a new drug or therapy. This data helps drug manufacturers see how competitors are pricing their products and may help to inform the pricing strategy for a new drug.

How are drug prices determined?

Drug manufacturers price their treatments based on the product’s estimated value. There are few regulations to govern pharmaceutical pricing. This means that the manufacturer list price could be as high as $71,306 dollars for a single treatment.

Lack of pricing regulation is one reason why insulin costs increase each year. With a high market demand and few generic competitors, insulin manufacturers can continue raising prices.

The costs Americans actually pay for prescriptions depends on many factors, including:

  • Their insurance plan
  • The list of drugs covered by that plan
  • The size of their deductible, and
  • The discount that the insurance company received from the drug manufacturer

With so many variables at play, out-of-pocket drug costs can be extremely unpredictable. Below, we’ve compiled the 25 states with the highest and the lowest total pharmaceutical charges.

25 states with the highest total prescription charges

Definitive's Healthcare Insights are developed with data from the Definitive Healthcare platform. Want even more insights? Start a Free Trial now and get access to the highest quality data and intelligence on hospitals, physicians, and other healthcare providers.

RankStateNumber of Unique DrugsNumber of PrescriptionsDays of SupplyTotal Prescription ChargesExplore This Dataset
1California6,31859,971,0472,034,405,229$30,224,373,470Explore This Profile
2Texas5,83443,861,9441,447,105,212$23,370,192,771Explore This Profile
3New York6,12143,977,3081,463,176,036$20,424,209,185Explore This Profile
4Puerto Rico4,91435,936,0681,096,854,533$16,830,869,169Explore This Profile
5Florida5,45522,779,392832,726,499$13,705,883,323Explore This Profile
6North Carolina4,90627,958,270936,800,113$12,540,458,941Explore This Profile
7Ohio5,46728,843,553921,873,158$11,618,355,083Explore This Profile
8Pennsylvania5,47532,929,5481,128,362,311$10,875,835,475Explore This Profile
9Michigan5,31226,887,017944,542,009$8,919,022,555Explore This Profile
10Georgia4,95419,027,491612,232,233$8,515,485,851Explore This Profile
11Louisiana5,00722,932,654709,991,052$8,484,674,076Explore This Profile
12New Jersey5,34617,419,799613,196,956$7,958,545,069Explore This Profile
13Tennessee4,91716,084,762542,021,975$7,511,505,451Explore This Profile
14Missouri4,95020,729,014660,550,619$7,109,716,152Explore This Profile
15Illinois4,63511,333,339382,829,584$6,832,954,469Explore This Profile
16Oklahoma4,69420,726,452741,767,685$6,429,461,175Explore This Profile
17Washington4,99519,518,623691,753,906$6,412,983,607Explore This Profile
18Kentucky4,84819,766,553602,531,829$5,964,936,862Explore This Profile
19Massachusetts4,6288,963,345299,640,182$4,744,208,667Explore This Profile
20Alabama4,3129,438,209332,363,643$4,651,585,547Explore This Profile
21Arkansas4,43615,634,916489,732,241$4,550,827,006Explore This Profile
22Virginia4,6038,902,543297,089,811$4,161,291,930Explore This Profile
23Wisconsin4,34310,642,572423,386,897$3,586,688,794Explore This Profile
24Utah4,1307,769,249274,120,022$3,556,258,193Explore This Profile
25South Carolina4,2196,322,193210,497,623$3,527,063,660Explore This Profile

Fig. 1 Data is from Definitive Healthcare’s Medical Claims database. Data represents physician drug market analytics aggregated by state. Prescription volumes and total charges represent all-payer medical claims for the 2019 claim year, the most recent full-year data available. All-payer medical claims are sourced from multiple medical claims clearinghouses in the United States and updated monthly. Accessed September 2020.

Which U.S. state has the highest total prescription charges?

California has the highest total prescription charges. The state reported $30.2 billion in total charges in 2019. This is the amount charged to insurance companies for the cost of 59.9 million prescriptions filled for 6,318 different drugs.

Texas and New York have the second and third highest total prescription charges. These three states—California, Texas, and New York—are among the largest states by population size. Population size has a strong impact on total prescription charges. With a greater number of patients to care for, providers write more prescriptions. This means that providers in large, populous states are more likely to have higher pharmaceutical charges than providers in smaller states.

It’s also worth noting that California, Texas, and New York are home to some of the nation’s top hospitals, according to U.S. News & World Report. Many of these top hospitals are academic research facilities or specialized cancer research centers. These types of hospitals are more likely to administer costly, experimental drugs to their patients. Drugs of this kind certainly impact total prescription charges.

25 states with the lowest total prescription charges

Definitive's Healthcare Insights are developed with data from the Definitive Healthcare platform. Want even more insights? Start a Free Trial now and get access to the highest quality data and intelligence on hospitals, physicians, and other healthcare providers.

RankStateNumber of Unique DrugsNumber of PrescriptionsDays of SupplyTotal Prescription ChargesExplore This Dataset
1Wyoming2,6791,275,54647,300,661$377,254,403 Explore This Profile
2Alaska2,7091,071,73940,306,365$416,749,079 Explore This Profile
3South Dakota2,8631,481,57151,367,394$486,277,617 Explore This Profile
4Vermont2,8691,508,72161,351,683$487,244,607 Explore This Profile
5Delaware2,827938,32130,102,475$559,850,207 Explore This Profile
6Hawaii2,9641,219,96842,335,305$569,882,758 Explore This Profile
7Rhode Island2,627684,06722,558,192$595,083,087 Explore This Profile
8Washington, D.C.3,1891,084,68336,067,565$843,934,957 Explore This Profile
9New Mexico3,4862,855,01191,379,066$844,467,624 Explore This Profile
10New Hampshire3,1863,047,347115,578,344$931,768,878 Explore This Profile
11Montana3,2493,453,571118,964,341$986,496,441 Explore This Profile
12Nebraska3,8564,104,534141,353,531$1,470,772,399 Explore This Profile
13North Dakota3,2776,219,055221,251,750$1,508,531,908 Explore This Profile
14Idaho3,5394,906,720177,891,857$1,554,376,184 Explore This Profile
15Oregon3,9275,319,912179,886,395$1,707,642,773 Explore This Profile
16Connecticut3,6762,375,58881,976,526$1,890,473,476 Explore This Profile
17Kansas4,0237,538,977250,314,794$2,204,645,049 Explore This Profile
18Nevada3,9193,734,421127,283,642$2,448,485,931 Explore This Profile
19West Virginia3,9587,402,010248,262,165$2,513,049,800 Explore This Profile
20Iowa4,1349,222,410323,374,829$2,606,676,262 Explore This Profile
21Indiana4,1476,129,477203,428,885$2,634,033,556 Explore This Profile
22Maine3,9039,183,667410,391,846$3,088,718,008 Explore This Profile
23Colorado3,8374,546,770161,340,304$3,197,004,648 Explore This Profile
24Arizona3,8463,456,582106,037,230$3,348,149,751 Explore This Profile
25Minnesota4,50013,858,840464,743,876$3,368,982,424 Explore This Profile

Fig. 2 Data is from Definitive Healthcare’s Medical Claims database. Data represents physician drug market analytics aggregated by state. Prescription volumes and total charges represent all-payer medical claims for the 2019 claim year, the most recent full-year data available. All-payer medical claims are sourced from multiple medical claims clearinghouses in the United States and updated monthly. Accessed September 2020.

Which U.S. state has the lowest total prescription charges?

Wyoming has the lowest total prescription charges in the United States. In 2019, Wyoming reported just over $377 million in total charges. With a population of only about 579,000 residents, Wyoming has the smallest population of all U.S. states. This small population size is likely a strong contributing factor in the state’s low prescription charges.