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Objectives To assess the main factors that contributed to the increase in medicine expenditure of the National Health Insurance Fund in Sudan in the period 2006-2010. Methods A time-series decomposition analysis was adopted for pharmaceutical expenditure increases characterized by trends and seasonality (time-series data per quarter). The change in real spending is decomposed into three components: price, quantity and residual. The contributions of these components towards pharmaceutical expenditure were then determined by means of chained price and quantity indexes. Key findings The consumer price index rose by about 195.56% over the period of the study. The real spending index shows that real medicine expenditures increased by 66.30% during the period 2006-2010. Relative prices increased by 6.73%; Quantity increased by 91.04%, and the residual contribution decreased by 18.44%. Conclusion Price factors, quantity and residual are significant determinants of expenditure for the National Health Insurance Fund in Sudan. The largest contribution to the increase in real medicine expenditure was made by the quantity factor. [ABSTRACT FROM AUTHOR]