Medicare program helps slow rate of drug spend

Federal analysts say that the government's new Medicare drug program has slowed the rate of growth in the amount of money being spent on therapeutics as insurers negotiate lower prices for members. But the trajectory of spending on healthcare in the U.S. will continue to arc upwards, leading to 2016 when the federal government will cover the cost of 50 percent of all care provided. At that point, the total bill for healthcare, drugs included, will hit $4 trillion, accounting for 20 percent of all economic activity. In 1985, healthcare accounted for 10 percent of the economy.

These new numbers are putting fresh emphasis on the growing national debate over healthcare coverage in the U.S. The Washington Post quotes Karen Davis at the Commonwealth Fund saying that the healthcare system in the U.S. is in need of a thorough transformation as insurers have failed to control costs either through negotiating prices or passing on high deductibles to consumers. Look for plenty more reaction as these numbers sink in.

- read the report on the trend from The Washington Post

ALSO: In the U.K., meanwhile, the Office of Fair Trading is calling for a new way to price drugs, with an emphasis on their clinical and cost effectiveness. Current rules allow drug companies to set prices while capping profits. Report

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