In the eye of the beholder

Here are two contrasting reactions to the news that health care spending rose 6.1 percent in 2007.

Forbes: Health Spending Continues to Explode

New government figures show generic drugs slowed zooming outlays, but not by much.

When the economy expands, that’s a good thing. But when spending on health care keeps rising, without tangible benefits like healthier people, it means everyone’s a bit poorer.

WSJ Health Blog: Tough Drugs Market Slows Growth in Health Spending

It’s a tough time to be in the drug business — lots of generic competition, and plenty of scrutiny from regulators wary of approving new drugs too quickly.

But those same forces are slowing the rise in health-care spending. A paper published today in Health Affairs found that in 2007, total U.S. health care spending grew by 6.1% — the slowest rate since 1998.

It just confirms the adage that where you stand depends on where you sit.

“Generic competition” isn’t really the issue for drugmakers. The real problem they face is a lack of new products to take the place of those whose patents are expiring.

January 6, 2009

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