Background: In Ethiopia, more than half of all out-of-pocket (OOP) health expenses rnare for medicine. However, there is a scarcity of information on the cost impact of rnmedicine on households. rnObjective: This study aims to investigate the financial implications of OOP payment rnfor medicines for Ethiopian households. rnMethods: A sequential mixed methods explanatory design was employed in this study. rnThe quantitative part involved a secondary analysis of the national household rnconsumption and expenditure surveys of 2010/11 and 2015/16. Catastrophic OOP rnexpenditures for medicines were measured using the â€œcapacity to payâ€ method. Logistic rnregression models were used to determine the factors of catastrophic medicine payment. rnIn-depth interviews were used to collect qualitative data from key informants working rnin relevant government agencies. The framework analysis approach was used also to rnanalyze qualitative data. rnResults: From 2010 to 2016 the total percentage of households facing catastrophic rnmedicine payments decreased from 1% to 0.73%. This means payment for medicines rnpushed 11,132 households into poverty in 2015/16. The majority of disparities were rnexplained by economic status, place of residence, and type of health services. The rnqualitative analysis identified four major themes in the areas of the current context of rnmedicine OOP payment, aggravating factors for medicine OOP, failures to implement rnplanned interventions, and plans. rnConclusion: The findings show that, despite improvements over the years, OOP rnpayment for medicines pushed thousands of Ethiopian households to poverty. Hence, rnintroducing and strengthening the implementation of pro-poor policies are rnrecommended.