Prescription drugs still fall in the plus column as a category for consumer spending, but last year retail spending on prescription slowed to the lowest rate in more than 40 years.
The Centers for Medicare and Medicaid Services reports that consumers are increasingly turning to generics to fill their drug needs largely because of a “growing concerns for drug safety.”
Last year the Food and Drug Administration (FDA) was given new authority to issue the most serious warnings that a drug can lead to death – a "black box" warning.
There were 68 “black box” warnings issued by the FDAin 2007, compared to 58 warnings in 2006, and 21 issued in 2003, according to the report.
The agency was given the authority to mandate drug warnings by the Amendments Act of 2007. Previously the FDA could only request the manufacturer comply.
In the first demonstration of its new authority in 2007, the FDA ordered makers of older antipsychotics, such as thorazine and prolixin, to carry a new black box warning alerting physicians of their dangers.
Safety concerns may have added to the drug consumption slowdown – 4.9 percent or $228 billion. Drug spending peaked in 1999 at 18.8 percent, and slowed slightly in 2006 to 8.6 percent.
Older drugs that have generic versions are falling into favor because a) they’ve been around longer so have a more reliable safety record and b) they’re cheaper because patents have expired on the more expensive blockbuster brand-name drugs.
Meanwhile, spending for other sectors of healthcare such as payments to hospitals, grew slightly last year, while the compensation for physician services declined due to a reduction in payments for Medicare patients authorized by Congress.
Whether consumers will continue to opt for generics or fewer drugs in general is a future uncertainty that will impact our national spending on health.
Despite slowed growth, health care costs continue to risse at an unsustainable rate of $2.2 trillion in 2007 or 16.2 percent of the gross domestic product, which is a record. #