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Price rises "will drive US drug spend to $457.8 billion by 2019"
08 February 2010
US prescription drug spending is estimated to have grown 5.2% to $246.3 billion in 2009, a two percentage point rise over 2008 which was due to increased per person usage of medicines and higher price growth for brand-name drugs, say new government figure.
Last year's increase in medicines use was driven by the need for antiviral drugs to treat the H1N1 flu virus, according to analysts at the Centers for Medicare and Medicaid Services (CMS), reporting on their annual health care spending projections in the journal Health Affairs. BY 2019, the nation's prescription drug expenditures are expected to reach $457.8 billion, with growth accelerating over the period primarily as a result of price increases, they say.
The CMS actuaries estimate that US health care spending rose 5.7% to $2.5 trillion from 2008 to 2009, against a decline in Gross Domestic Product (GDP) over the same period. As a result, healthcare's share of the economy grew 1.1 percentage points in 2009 to a projected 17.3%, which is the largest one-year increase in GDP share since the federal government began keeping track of such data in 1960, they note.
Moreover, health spending by public payers grew 8.7% to $1.2 trillion in 2009, which is much faster than that of private payers - up 3% to $1.3 trillion, they add. This is due to the 6.5% growth in enrollment and 9.9% rise in spending experienced by Medicaid (the federal/state health programme for the poor), and this in turn was the result of increasing unemployment related to the recession. Conversely, the actuaries project a 1.2% drop in enrollment in private insurance during the year, despite federal subsidies for people who have lost their jobs to extend their private insurance coverage via the Consolidated Omnibus Budget Reconciliation Act (COBRA), which increased participation in these plans.
During 2009-19, health spending is expected to increase at an average annual rate of 6.1%, which is 1.7 percentage points faster than GDP, and during that time public spending will continue to grow faster at 7% a year on average - than private spending, which will average 5.2% a year, the analysts forecast. As a result, by 2012 public payers will be paying for slightly more than half of the health care purchased in the US compared to 47% in 2008, they note.
Commenting on the projections, CMS actuary Christopher Truffer pointed out that they do not take account of the effects of any potential health care reform legislation. "But we do expect that under current law, health care spending will on average grow faster than the overall economy and that the public share of health spending will continue to increase over the next decade," he said.
Despite anticipated growth in the overall economy in 2010, total US health spending growth will slow down during the year, the analysts believe. However, it will begin to accelerate again in 2011, with public spending continuing to grow faster than private spending, and by 2019 national health expenditures will have nearly doubled, reaching $4.5 trillion and consuming 19.3% of GDP, they forecast.
By Lynne Taylor
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