Out-of-pocket Expenditure on Medicines and Financial Risk Protection in India: Is the Sustainable Development Goal in Sight?

Abstract

Out-of-pocket expenditures on medicines (ME) form a large share of the total out-of-pocket expenditure (OOPE) and pose financial risks for Indian households. Using repeated cross-section analysis of national health surveys for 2014 and 2017–2018, change in financial risk due to ME is examined. Logit regression is used to look at the factors associated with financial risk due to medicine expenditure. Households incurring ME declined by 7%. Per capita monthly ME declined to ₹80 (US$1.25, 95% CI: 78–82) from ₹111 (US$1.74, 95% CI: 108–114). Catastrophic headcount declined to 8.6% from 13.5%, but the mean positive overshoot remained constant at ₹9.5 at the 10% threshold. Impoverishment headcount also declined to 1.4% from 2.2%, and 6.1% persons were immiserated in 2017–2018. Distribution of ME and catastrophe continued to be pro-rich, but impoverishment was greater in poorer households. Among states, the headcount of catastrophe was highest in Kerala, and Odisha had the greatest impoverishment in 2017–2018. Cancer patients faced the largest catastrophe, and tuberculosis patients faced the largest impoverishment due to ME. The odds ratio of financial vulnerability was 2.91 (95% CI: 2.5–3.3) for households with more than one member incurring ME, 1.82 (95% CI: 1.6–2.1) for households with chronic disease patients, and 1.6 (95% CI: 1.4–1.8) for private care utilisation. We conclude that declining OOPE led to a decline in financial risk due to ME.