Government bean counters owe a big thanks to the drug industry. Though healthcare spending in the U.S. did rise again in 2007, the increase fell to its lowest rate in 10 years. And that's at least partly because of less growth in prescription spending. Overall, the U.S. spent $2.2 trillion on healthcare in 2007, 6.1 percent more than in 2006. Drug spending, however, increased by just 4.9 percent--and that's the lowest growth rate since (drum roll, please) 1963.
That slower growth is most likely because of increased use of that bane of Big Pharma, generic drugs, the government report concluded. Generics accounted for 67 percent of the filled scrips in 2007, up from 60 percent in 2005. The Wall Street Journal Health Blog adds another probable cause: the slowdown in new-drug approvals, which means that the number of new branded drugs isn't keeping pace with the number of old ones falling off patent.
The government hasn't released figures for 2008 yet, but IMS Health has forecasted flat spending on pharma for the year.
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