Will Slowing Sales Mean Lower Medical Insurance Rates?March 2008
Though sales are in the billions and American use of prescription drugs seems to be a very hot topic, according to the annual U.S. Pharmaceutical Market Performance Review sales of U.S. prescription drugs grew only 3.8% in 2007, the lowest increase since a 3.3% rise in 1961. As out-of-pocket costs drive medical insurance costs higher and higher, will the slowing rate of prescription drug use lead to lower
health insurance costs?
The report found that the slower growth rate of new drugs was likely due in part to the rising popularity and availability of less expensive generic versions of brand-name medications. According to the report, the volume of generic drugs grew by 10% and made up more than 67% of all prescription drug sales in 2007.
In part this is because many health insurance companies refuse to cover the more expensive prescription drugs, and instead allow for cheaper generics that have proven just as useful.
But
medical insurance woes aren't the only thing impacting the pharmaceutical industry. A decline in the number of new approved medications, growing concerns about drug safety, and a big rise in the number of consumer advisories and market withdrawals of medications are also possible reasons for the slow sales growth.
Last year the FDA issued 68 major warnings in 2007, and as people perceive the newer drugs to be less than safe, they fall back on generics, which have been on the market for some years and are less likely to have dangerous side effects.
Facts on:
Health Insurance and Prescription Drugs
Did you know...
Americans spent $286.5 billion in 2007 on prescription drugs?
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Overall, the result is that people are more likely to find affordable health insurance that only covers generics, and the public isn't feeling too brave about trying out new and perhaps dangerous drugs anyway.
With more and more aging baby boomers relying on prescription drugs their use isn't going to decline much in coming years, but the fact that it has slowed a bit is good news for savvy shoppers looking for medical insurance. Leaning on generics will definitely save money, and in many cases provide treatment that is as effective, and perhaps even safer, than the newest pill on the market.
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