DRUG SPENDING FELL IN 2005, STUDY FINDS

A recent studyfound that Americansspent less on prescriptiondrugs lastyear than the yearbefore. As a result,health care costsgrew by the sameamount as previous years, according to ananalysis by the Center for Studying HealthSystem Change.

In 2005, consumer spending grew at anannual rate of 7.4%. The 2006 growth rate,based on spending data for the first quarterof the year, is 7.7%. In the past year,spending increased on hospital care,physician services, home health agencies,and ambulance services.

The report also pointed out that spendingon health care continues to rise, comparedwith overall US economic growth.The increases were balanced by spendingon prescription drugs. Prescription drugcosts grew by 4.8% last year, a decreasefrom 8.3% in 2004.

Paul Ginsburg, president of the center,said that the pharmaceutical industrycould be a contributor in reducing costs inthe near future as well. For instance,Merck's patent for Zocor (simvastatin)expired in June 2006. Patients are expectedto save money once its generic competitorsenter the marketplace.