/publications/issue/2005/2005-03/2005-03-9408

Feds Report Rx Expenditures Rose More Slowly in 2004

Author: Ken Rankin

Federal officials are crediting a 50% drop in the growth in the number of prescriptions dispensed per person last year as a key factor in reducing the upward spiral in overall US health care spending during 2004.

The encouraging new figures, contained in the annual report from the Centers for Medicare and Medicaid Services Office of the Actuary, confirm that overall health care expenditures in the United States grew by 7.7% in 2003 to $1.7 trillion—a rate of increase significantly slower than the 9.3% growth rate for health care spending in 2002.

The growth in spending for prescription drugs decelerated even more significantly to 10.7%, down from 14.9% in 2002, the federal report said.

Among factors contributing to this spending slowdown were the conversion of a popular allergy drug to OTC status, several drugs losing their patent protection, and the expanded use of tiered copayment plans.

As a result of these factors, "growth in the number of prescriptions sold per person slowed to 1.7%, about half the 2002 growth of 3.5%,"federal health officials said.

"This is good news for the public and our health care system and is the result of changes designed to slow down the growth in spending,"said Health and Human Services Secretary Tommy G. Thompson. Administration officials pledged to take further steps to hold down health costs during 2005.

Mr. Rankin is a freelance medical writer.