UK social care and health policy

Report Summary:

Cross-country comparisons of healthcare and drug expenditures are vital for policy discussions but are complicated by inconsistent and incomplete official statistics. The World Health Organization’s System of Health Accounts (SHA) and the OECD provide key frameworks, though non-retail drug spending, especially in hospitals, is often omitted. This analysis enhances official data to produce the most comprehensive estimates of total drug spending to date.

Findings show that drug expenditures remain stable at about 15% of total healthcare spending across 12 major markets, ranging from 9% to 20%. Countries with lower overall health spending tend to have a higher drug share, while those with strong market access controls and price negotiations, such as the UK, have a lower share. The UK’s proportion has stayed around 9% for over two decades, while the U.S. leads in absolute and per capita spending.

Differences in pricing, access, and uptake of innovative medicines explain much of the remaining variation. However, opaque discount and rebate structures and diverse health system priorities prevent definitive judgments about optimal spending levels.

Structured Evidence Review by the Growth and Reform Network, supported by The Health Foundation

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