Hi, just went long PFE after the split. Government study says spending on prescription drugs to increase by over 11% each of the next two years. Jeff
<<U.S. Says Drug Spending to Grow 11.2% Yearly Over Next 2 Years
By Paul Heldman
Washington, July 11 (Bloomberg) -- U.S. spending on
prescription drugs will surge an average of 11.2 percent annually
over the next two years, according to new government figures.
The new estimate is slightly higher than the 9.6 percent
average annual increase projected last September by actuaries at
the Health Care Financing Administration, the U.S. agency that
runs government health insurance programs for the elderly and
poor.
While drug costs account for less than 10 percent of U.S.
health-care spending, they are surging, according to the latest
study, which appears in the July edition of the journal, Health
Affairs. The projections are consistent with reports by other
economists, benefits experts and health industry analysts.
They are being made as President Bill Clinton and the
Republican-controlled Congress prepare to battle over whether to
provide prescription drug benefits to the elderly, who pay about
$600 a year on average for medicine. Clinton has proposed a 10-
year, $118 billion plan to provide prescription drug coverage to
senior citizens as part of his proposal to overhaul the Medicare
health insurance program for the elderly.
Demand for drugs is increasing because health maintenance
organizations are charging nominal fees for prescriptions, while
the introduction of breakthrough drugs and industry television
advertising to consumers are causing more patients to see their
doctors for prescriptions.
New Government Estimates
The new government figures revise down slightly the growth
in U.S. health spending as a percentage of the nation's goods and
services. But the government estimates show health insurance
costs will rise as much as 9 percent annually over the next two
years, causing U.S. health spending per person, adjusted for
inflation, to accelerate this year and next.
Still, U.S. health spending will grow to 16.0 percent of the
nation's total output of goods and services in 2007. That is
slightly lower than the September government estimate of 16.6
percent.
''The growing uninsured population is expected to act as a
restraint on long-term growth in private health spending,'' the
study says.
Congress is currently considering proposals to help some of
the nation's 43 million citizens without health insurance get
coverage. Proposals range from tax incentives to giving
businesses greater opportunity to band together to bargain with
insurers for lower-cost coverage.
A separate study in the July issue of Health Affairs says
that health insurance buying cooperatives, touted by Republican
and Democratic legislators as a way for businesses to team up to
hold down rising health costs, have done little to contain rising
premiums.
''Pooling does not seem to have enhanced the accessibility
and affordability of insurance to employers,'' according to the
study by economists at the RAND research group.
U.S. Says Drug Spending to Grow 11.2% Yearly Over Next 2 Years
By Paul Heldman
Washington, July 11 (Bloomberg) -- U.S. spending on
prescription drugs will surge an average of 11.2 percent annually
over the next two years, according to new government figures.
The new estimate is slightly higher than the 9.6 percent
average annual increase projected last September by actuaries at
the Health Care Financing Administration, the U.S. agency that
runs government health insurance programs for the elderly and
poor.
While drug costs account for less than 10 percent of U.S.
health-care spending, they are surging, according to the latest
study, which appears in the July edition of the journal, Health
Affairs. The projections are consistent with reports by other
economists, benefits experts and health industry analysts.
They are being made as President Bill Clinton and the
Republican-controlled Congress prepare to battle over whether to
provide prescription drug benefits to the elderly, who pay about
$600 a year on average for medicine. Clinton has proposed a 10-
year, $118 billion plan to provide prescription drug coverage to
senior citizens as part of his proposal to overhaul the Medicare
health insurance program for the elderly.
Demand for drugs is increasing because health maintenance
organizations are charging nominal fees for prescriptions, while
the introduction of breakthrough drugs and industry television
advertising to consumers are causing more patients to see their
doctors for prescriptions.
New Government Estimates
The new government figures revise down slightly the growth
in U.S. health spending as a percentage of the nation's goods and
services. But the government estimates show health insurance
costs will rise as much as 9 percent annually over the next two
years, causing U.S. health spending per person, adjusted for
inflation, to accelerate this year and next.
Still, U.S. health spending will grow to 16.0 percent of the
nation's total output of goods and services in 2007. That is
slightly lower than the September government estimate of 16.6
percent.
''The growing uninsured population is expected to act as a
restraint on long-term growth in private health spending,'' the
study says.
Congress is currently considering proposals to help some of
the nation's 43 million citizens without health insurance get
coverage. Proposals range from tax incentives to giving
businesses greater opportunity to band together to bargain with
insurers for lower-cost coverage.
A separate study in the July issue of Health Affairs says
that health insurance buying cooperatives, touted by Republican
and Democratic legislators as a way for businesses to team up to
hold down rising health costs, have done little to contain rising
premiums.
''Pooling does not seem to have enhanced the accessibility
and affordability of insurance to employers,'' according to the
study by economists at the RAND research group.
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