May 15 (Bloomberg) -- Older Americans paid an average 9.6 percent less last year for widely used generic drugs, the biggest drop since at least 2003, according to a report by the retiree lobbyist group AARP.

Forty-three of the most-used generic medicines, including Teva Pharmaceutical Industry Ltd.'s copy of Merck & Co.'s cholesterol pill Zocor, had price declines of as much as 70 percent, the report found. Only nine of 185 generic drugs tracked by the Washington-based nonprofit organization were more costly for wholesalers to purchase. Most prices were unchanged.

Health-care spending has soared as the U.S. population ages and more people face chronic conditions including high blood pressure, cholesterol and diabetes. Lower-priced copies of brand-name drugs offer a valuable alternative, especially since an earlier study found a 7.4 percent price increase last year in the top 220 brand-name medicines, said the AARP, which represents people age 50 and older.

``As the economy continues to tighten, people need to look for cost-savings at every opportunity,'' said John Rother, AARP's director of public policy, in an e-mailed statement. ``Often more expensive, brand-name drugs aren't necessarily any more effective than the generic `cousins' that you won't see advertised on TV.''

Americans paid almost $1.9 trillion for health care in 2005, according to a report released in November by the Congressional Budget Office. The agency expects medical spending to rise to 25 percent of the economy by 2025, from 16 percent now. Presidential candidates have focused on more cost-effective treatments as a way to hold down spending.

1984 U.S. Law

A 1984 U.S. law allows generic drugs to be introduced after the patents on a brand-name medicine expire, or are declared to be invalid by a court. The copies are marketed under the chemical name and can cost as much as 85 percent less than the original drug. Prices fall as competition enters the market.

The generic drugs with the largest drop in prices last year included lisinopril, a copy of AstraZeneca Plc's Zestril and Merck & Co.'s Prinivil for high blood pressure, and mirtazapine, a copy of Schering-Plough Corp.'s antidepressant Remeron, according to the AARP report.

To contact the reporter on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net.

Last Updated: May 15, 2008 00:00 EDT