Accuracy of annual prescription drug expenditure forecasts in AJHP

Purpose. The accuracy of the forecasts of drug expenditures in nonfederal hospitals and clinics published annually in the American Journal of Health-System Pharmacy (AJHP) relative to the accuracy of forecasts produced by the Centers for Medicare and Medicaid Services (CMS) was evaluated. Methods: AJHP-published forecasts of drug expenditure growth for nonfederal hospitals (for the years 2003 through 2013) and clinics (for the years 2004 through 2013) were compared with data on actual growth. Data on actual and projected growth published by CMS were analyzed for the years 2003 through 2012. The mean absolute error and directional accuracy of the forecasts published in AJHP for nonfederal hospitals and clinics and the CMS forecasts were determined and compared. Results: Actual spending growth was within the range of the forecast published in AJHP for 2 of 11 years for nonfederal hospitals and for 3 of 10 years for clinics; the forecasts for nonfederal hospitals and clinics were directionally accurate 27.3% and 60.0% of the time, respectively. The mean absolute errors of the AJHP-published drug expenditure forecasts for the nonfederal hospital and clinic sectors were 2.0 and 4.7 percentage points, respectively. The CMS forecasts of overall drug spending were directionally accurate 70% of the time, and the mean absolute error (2.2 percentage points) was not statistically different from that of either sector forecast published in AJHP. Conclusion: The annual drug expenditure forecasts published in AJHP have been reasonably accurate for predicting growth in prescription expenditures when compared with other available drug expenditure forecasts.