2007 spending on prescription drugs slows

WASHINGTON, Jan. 6 (UPI) -- Spending on prescription drugs in 2007 showed the smallest increase in 40-plus years, driven by low-cost drugs and prescriptions, the U.S. government said.

The report released Tuesday said lower spending was the key factor in holding overall healthcare spending to its smallest increase since 1998, USA Today reported.

More than half of the slowdown in 2007 resulted from less growth in retail prescription drug spending, which rose 4.9 percent in 2007, the lowest rate since 1963, the annual report from the Centers for Medicare and Medicaid Services' Office of the Actuary.

The U.S. tab for healthcare services rose 6.1 percent in 2007 to $2.2 trillion -- $7,421 per person, the report said.

Spending on other healthcare areas such as doctor and hospital costs and Medicare services, rose at or above levels seen in previous years. Health costs make up more than 16.2 percent of the economy, USA Today said.

"The big story is a very sharp slowing" in drug spending, economist Paul Ginsburg of the Center for Studying Health System Change, told USA Today. He said the slowdown is probably temporary, likely tied to recent expirations of patents on drugs such as cholesterol drug Zocor, sleep aid Ambien and allergy drug Flonase.