Drug Giants Can Save America Billions. But Will They?
Heart drugs and other preventative medicines are keeping down Medicare costs. But pharma's pricing and priorities may hold back advances.
The saving, and savings, power of cholesterol drugs like Crestor.
Photographer: Bloomberg/BloombergPharma and its drug-pricing practices have come under fire from critics on the right and left, and from lawmakers on Capitol Hill to Donald Trump’s White House. But amid the political bashing, here’s something that may come as a surprise: The industry managed to save taxpayers some money.
That conclusion comes out of a recent study in Health Affairs from Harvard economist and Obamacare architect David Cutler, which sought to identify the reasons behind a mysterious slowdown in health-care spending among older Americans in recent years. He calculates that Medicare spending per beneficiary grew by 3.8 percent annually between 1992 and 2004 on an inflated-adjusted basis; since 2005, though, the growth rate has slowed to just 1.1 percent. In 2012 alone, spending was nearly $3,000 lower than expected.