USC Price School of Public Policy

USC Schaeffer Center for Health Policy & Economics:

Documenting flow of money through pharmaceutical distribution chain

June 14, 2017

The rapid increase in spending on prescription drugs has been widely recognized, prompting calls for government intervention. But little is understood about how much the various players in the pharmaceutical distribution chain are making. A new report published by the USC Schaeffer Center for Health Policy & Economics – co-authored by Neeraj Sood, Tiffany Shih, Karen Van Nuys, and Dana Goldman – found that for every $100 spent on retail prescription drugs in the U.S., the manufacturer received $58, of which about $17 goes direct production costs. The remaining $41 accrues to intermediaries in the pharmaceutical distribution chan.