OBJECTIVES: The Centers for Medicare and Medicaid Services (CMS) estimated the US spent $405.9 billion on retail prescription drugs in 2022. However, these resources are inequitably distributed, and CMS has established a roadmap for health equity. This research quantifies the variation in the Medicare and Medicaid per beneficiary prescription utilization and spending.

METHODS: Using the 2019 Medicare and Medicare insurance claims, we disaggregated prescription utilization and total and out-of-pocket drug spending by six race/ethnicity groups: American Indian/Alaskan Native, Asian/Pacific Islander, Black, Hispanic (mutually exclusive), White, and Other/Unknown. We estimated utilization (number of prescriptions) and total and out-of-pocket spending, disaggregated by age, sex, race/ethnicity, and geography. Ongoing work age-standardizes these comparisons.

RESULTS: Within our Medicare sample, beneficiaries averaged 9.4 prescriptions, $1149.5 in total spending, and $104.9 in total out-of-pocket spending. The race/ethnicity group with the greatest utilization was American Indian/Alaskan Natives (11.4 prescriptions per beneficiary), the highest total spending was among Black non-Hispanics ($1466.2 per beneficiary), and the highest out-of-pocket spending was among White non-Hispanics ($120.0 per beneficiary). The lowest Medicare utilization and total spending was for the Other/Unknown group (7.1 prescriptions and $1001.4 per beneficiary, respectively) and the lowest out-of-pocket spending was among Hispanics ($51.4 per beneficiary). Within Medicaid, beneficiaries averaged 13.1 prescriptions, $1256.8 in total spending, and $0.6 in total out-of-pocket spending. The race/ethnicity group with the greatest utilization and total spending was White non-Hispanics (16.6 prescriptions and $1742.0 per beneficiary), and the group with the lowest utilization and total spending was Hispanics (8.6 prescriptions and $471.8 per beneficiary). Medicaid out-of-pocket spending was minimal (<$2 per beneficiary) for all race/ethnicity groups.

CONCLUSIONS: Substantial variation exists in Medicare and Medicaid prescription utilization and spending by race/ethnicity.