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Prescription drug cost increase lowest since 1994













A slowdown on spending for prescription drugs is credited for leading the slowing in health care costs overall, according to a recent study. "National Health Spending: Recent Slowdown Led by Prescription Drug Spending," published in the January/February issue of Health Affairs, says that drug spending grew by 8.2 percent in 2004, "smaller than its share of the increase in recent years and much slower in absolute terms."

This is the first year of single-digit growth in prescription drug costs since 1994. The rate of growth in health care spending overall in 2004, 7.9 percent or nearly $1.9 trillion, was the lowest since the 6.3 percent increase in 2000. The slowdown in prescription drug spending was somewhat offset by an increase in spending in other sections, notably for hospital care.

Source: "National Health Spending: Recent Slowdown Led by Prescription Drug Spending," Health Affairs, January/February, 2006

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