Objective The objective of this research is to generate new evidence on financial implications of medicines out-of-pocket (OOP) payments for households. Another objective is to investigate which disease conditions contributed to a significant proportion of households’ financial burden. Setting All Indian states including union territories, 1993–2014. Design Repeated cross-sectional household surveys. Data Secondary data of nationwide Consumer Expenditure Surveys for the years 1993–1994, 2004–2005 and 2011–2012 and one wave of Social Consumption: Health for the year 2014 from National Sample Survey Organisation. Outcome measures OOP expenditure on healthcare in general and medicines in specific. Results Total OOP payments and medicines OOP payments were estimated to be 6.77% (95% CI 6.70% to 6.84%) and 4.49% (95% CI 4.45% to 4.54%) of total consumption expenditure, respectively, in the year 2011–2012 which marked significant increase since 1993–1994. These proportions were 11.46% (95% CI 11.36% to 11.56%) and 7.60% (95% CI 7.54% to 7.67%) of non-food expenditure, respectively, in the same year. Total OOP payments and medicines OOP payments were catastrophic for 17.9% (95% CI 17.7% to 18.2%) and 11.2% (95% CI 11.0% to 11.4%) households, respectively, in 2011–2012 at the 10% of total consumption expenditure threshold, implying 29 million households incurred catastrophic OOP payments in the year 2011–2012. Further, medicines OOP payments pushed 3.09% (95% CI 2.99% to 3.20%), implying 38 million persons into poverty in the year 2011–2012. Among the leading cause of diseases that caused significant OOP payments are cancers, injuries, cardiovascular diseases, genitourinary conditions and mental disorders. Conclusions Purchase of medicines constitutes the single largest component of the total OOP payments by households. Hence, strengthening government intervention in providing medicines free in public healthcare facilities has the potential to considerably reduce medicine-related spending and total OOP payments of households and reduction in OOP-induced poverty.
