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Growth of generics slows drug spending

Costs for buying certain therapies rocketed in '06

SAN FRANCISCO -- Growing use of generic drugs instead of the more expensive brand name medications they mimic kept the growth rate in US spending for prescription drugs to 2.8 percent in 2006, according to a report released yesterday.

While the growth rate on drug spending slowed from 5.4 percent in 2005, spending on certain kinds of medications grew sharply and is likely to continue to do so in coming years, according to the analysis by Medco Health Solutions Inc., the biggest US manager of drug benefits.

Spending on diabetes treatments may rise up to 70 percent by 2009, with spending on cancer drugs and psychiatric medications also likely to increase at "double-digit" rates, the report said. New specialty drugs for more illnesses will contribute to spending growth, led by biotechnology medicines.

The number of adolescent girls, ages 10 to 19, on medicines for diabetes grew much faster than the increase among boys, which could signal that girls are now at greater risk of developing the metabolic disorder, Medco said in a separate report Wednesday.

The jump in use of drugs for Type 2 diabetes, which is affected by diet, weight, and exercise, more than doubled for girls, compared with 33 percent growth among boys. Girls also had bigger increases in prescriptions for sleep aids and antipsychotics and treatments for attention deficit/hyperactivity disorder, compared with boys the same age.

"This analysis raises concerns and questions about the health of adolescents in America, and particularly girls," said Dr. Robert Epstein, Medco's chief medical officer. "While this may be evidence that more girls are for the first time being appropriately diagnosed and treated, it also raises red flags about the physical and psychological problems afflicting this population."

The expanding use of generic drugs will continue to moderate some of the overall spending growth, Medco says.

Medicines with combined US sales of $25 billion to $30 billion could lose patent protection over the next three years, the report said.

Drug spending accounted for 10.1 percent of all healthcare spending, trailing hospital expenses and doctor services, which accounted for just over half the total of $2.1 trillion, Medco said, citing estimates from the Centers for Medicare and Medicaid Services.