Psychiatric Disorders and the Medication of America

Part 2. Pills and Profits

Spending on Medications

Another way to look at the impact of the tremendous increase in diagnosis and medication of psychiatric disorders in the United States is to examine spending on prescription drugs and the corresponding profits of the pharmaceutical industry. One of the most useful sources of evidence on trends and patterns in spending on prescription drugs are the annual Drug Trend Reports issued by Medco Health Solutions, a corporation that manages prescription drug plans (http://medco.mediaroom.com/). Recent reports and press releases from Medco have charted sharp increases in spending on medications for children aged 19 and under. For instance, from 2000 to 2003, spending for ADHD medications increased by 23 percent whereas spending for antidepressants for children increased by 21 percent (CBS News, May 17, 2004).

As shown in the following graph from the 2007 Medco Drug Trend Report, psychiatric and neurological medications (shown in blue) now constitute the largest category of prescription drug expenditures in the youngest age group as well as in the 20-34 and 35-49 age groups. Although spending on medications for cardiovascular disorders and other conditions in older age groups will continue to be significant sources of profit for pharmaceutical companies, the rapid growth in prescriptions for psychotherapeutic medications for children and young adults have contributed substantially to financial well-being of pharmaceutical manufacturers in the 21st century.

Pharmaceutical Spending by Age
Source: 2007 Medco Drug Trend Report

Pharmaceutical Industry Profits

There is certainly no question about the profitability of the drug industry. Pharmaceutical manufacturing has always ranked as one of the most profitable sectors of corporate America. However, during the period we have been considering here, the profits of "Big Pharma" have skyrocketed. The following graph from Public Citizen (http://www.citizen.org/hrg/), an non-profit "watchdog" group, shows a steep increase in the profits of the drug industry starting in the mid-1980s, which parallels the dramatic growth of psychiatric diagnoses and psychotherapeutic drug use. To learn more about how and why this industrial sector has thrived, take a look at the documentary featured as an online "Resource" for this unit, Big Bucks, Big Pharma: Marketing Disease & Selling Drugs.

Pharmaceutical Industry Profits
 
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