Retail prescription drug spending in the US grew just 1.2% to $259.1 billion in 2010, a substantial slowdown from 2009's 5.1% increase and the lowest rate of rise in 51 years, say new government figures.
Overall, US health care spending grew just 3.9% in 2010, to $2.6 trillion or $8,402 per person. This represents a rise of just one percentage point over 2009, which in turn saw the lowest rate of growth since the government began reporting annually on national health expenditures (NHE) in 1960, according to the latest NHE report, which is produced by analysts at the Centers for Medicare & Medicare Services (CMS) and published in the January issue of the journal Health Affairs.
Prescription drug expenditures account for 10% of US health spending overall, and 2010's deceleration in growth was driven by slower growth in the volume of drugs consumed, a continued increase in the use of generics, loss of patent protection for certain branded drugs, fewer new product introductions and a substantial increase in prescription drug rebates within Medicaid, the US state/federal health programme for people on low incomes, according to the report.
As health spending growth remained low in 2010, its growth as a percentage of the national economy rebounded, rising 4.2% to account for 17.9% of Gross Domestic Product (GDP), say the analysts, who note that this share has risen, over time, from a level of just 5.2% in 1960.
Household health care spending reached $725.5 billion in 2010, representing 28% of total US health expenditures compared to 29% in 2007. Also during the year, growth in total private health insurance premiums slowed to 2.4% from 2.6% in 2009, continuing a slowdown that began in 2003. Nevertheless, in 2010 the growth in premiums exceeded the growth in insurer spending on health care benefits for the first time in seven years, with the net cost of insurance rising 8.4% ($11.3 billion). Out-of-pocket spending by consumers increased 1.8% in 2010, compared to growth of just 0.2% in 2009.
The federal government financed 29% of US health care spending ($742.7 billion) in 2010, up from 23% in 2003. Part of the increase came from enhanced federal matching funds for state spending on Medicaid under the American Recovery & Reinvestment Act, which expired last year. Total Medicaid spending grew 7.2% to $401.4 billion, down from 8.9% growth in 2009, and this was driven primarily by slowing growth in enrolment, say the analysts.
In 2010, spending for Medicare - the federal health programme for seniors and some disabled people - rose 5%, down from 2009's growth of 7%.
State and local governments’ share of total health spending declined from 18% in 2007 to 16% ($421.1 billion) in 2010, partly as a result of temporary assistance from the Recovery Act, while the share of health expenditures financed by private businesses reached 21% ($534.5 billion) compared to a 23% share in 2007.
Hospital spending accounted for around 30% of total health care expenditures and grew 4.9% to $814 billion in 2010, down from 2009's advance of 6.4%, while the increase in private health insurance spending for hospital services slowed considerably in 2010 to account for 35% of all hospital care.
And spending on physician and clinical services represented 20% of the total and grew 2.5% in 2010 to reach $515.5 billion, down from growth of 3.3% in 2009, says the CMS.