Pharma 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. Cutler and his co-authors found that half of the total slowdown came from reduced spending on treatments for cardiovascular events like heart attacks and related conditions. Half of that effect was attributed to greater use of some of pharma’s best-sellers: medicines targeting risk factors such as high blood pressure and elevated cholesterol, as well as chronic conditions like diabetes, which have proven effective. That was helped along by Medicare Part D in 2006, which lowered drug costs for seniors. This a huge deal in health policy. The idea that preventative care should push future spending down seems perfectly obvious. But it’s has been difficult to actually prove it. It is also a win for drugmakers. Pharma firms love to argue that […]
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