LABOR DEPT SEES SLOWDOWN IN Rx COSTS, THANKS TO GENERICS

Prescription drugs, which have drawn fire in recent yearsfor helping to drive up overall health care costs, are now gettingcredit for helping to hold those costs down, and theincrease in generic prescribing over the past few years isbeing cited as the key factor in that turnaround. The latestLabor Department statistics show that annual inflation indrug costs is at the lowest rate in 3 decades—a meager 1%.That is less than one fourth of the 4.4% increase in prescriptiondrug prices experienced in 2005.

In part, government economists attribute the decline inprescription inflation to generic-drug price reductions bymajor pharmacy and discount store chains over the pastyear. Efforts by managed care groups to encourage genericprescribing through reduced copays and other strategieswere also instrumental, they said.