The rate of growth in US healthcare spending slowed to its lowest rate since 1998 in 2007 on lethargic retail prescription drug spending and government administration, according to a Health Affairs analysis.
The journal found that US healthcare spending increased 6.1% in 2007 to $2.2 trillion, or $7,421 per person. Spending on prescription drugs grew by a mere 4.9%, while other healthcare services grew at about the same rate as or faster than in 2006.
The slowdown in spending on prescription drugs is attributable largely to increasing generic encroachment on branded drugs, driven in part by rising public spending on drugs. Spending growth from private sources accelerated in 2007 as public spending slowed, the journal found, “but public spending growth has continued to outpace private sources since 2002.”
In November, IMS Health revised its 2009 forecast for US drug spending growth down to 1%-2%, with sales between $287 billion and $297 billion.