Pharmaceuticals account for almost a fifth of all health spending on average across OECD countries. The increased consumption of pharmaceuticals due to the diffusion of new drugs and the ageing of populations (see Indicator 4.11 "Pharmaceutical consumption")
has been a major factor contributing to increased pharmaceutical expenditure and thus overall heath expenditure (OECD, 2008c). However, the relationship between pharmaceutical spending and total health spending is a complex one, in that increased expenditure
on pharmaceuticals to tackle diseases may reduce the need for costly hospitalisations and interventions now or in the future.