Press Release

PhRMA Statement on Annual Health Care Spending Report

PhRMA April 30, 2013

Washington, D.C. (January 5, 2009) — Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued the following statement today regarding the federal government’s annual health care spending report:

"The annual report on healthcare spending released by the Centers for Medicare and Medicaid Services (CMS) shows that growth on spending for prescription medicines in 2007 was at an historic low of 4.9 percent. This is the lowest growth since 1963 and below the 6.1 percent growth rate for all healthcare services. In fact, the low growth rate for spending on prescription medicines in 2007 accounted for more than half of the reduction in overall healthcare spending growth that occurred between 2006 and 2007, according to CMS.

“What’s more, medicines accounted for a small fraction of overall health spending—about 10 percent in 2007, the same proportion as in 1960, according to CMS data. The other 90 percent of spending is for hospitals, doctors, nursing homes, other health services and administrative costs.

“The small share of health costs attributable to medicines is yielding major health advances. For instance, medicines have played a key role in the dramatic decline in deaths resulting from heart disease.

“Any discussion on healthcare costs should include the increasing burden chronic diseases have on the nation’s healthcare system. Chronic diseases such as cancer, heart disease and diabetes result in seven out of 10 deaths in the U.S, and account for 75 cents out of every $1 spent on health care, according to the Centers for Disease Control and Prevention.

“Although many of these conditions could be prevented, the number of Americans suffering from chronic disease continues to rise dramatically. PhRMA has joined more than 40 other partners in the Partnership to Fight Chronic Disease, a national bipartisan coalition working to save lives and reduce healthcare costs through prevention and management of chronic disease.

“America’s pharmaceutical research companies also continue to work on new treatments aimed at chronic diseases and conditions. For example, pharmaceutical research companies are currently developing 277 life-saving and life-improving medicines for heart disease and stroke, 750 medicines to treat several types of cancer and 95 medicines for diabetes.

“America’s pharmaceutical research companies understand the importance of getting medicine to the patients who need it. That’s why, in 2005, PhRMA created the Partnership for Prescription Assistance. The PPA is a single point of access for struggling Americans to find out about more than 475 patient assistance programs that offer prescription medicines, both brand and generic, for free or nearly free.

“Since April 2005, more than 5.4 million Americans have been helped by the PPA. People who need help can find out if they may be eligible by calling the PPA’s toll-free number at 1-888-4PPA-NOW or visiting the PPA’s user-friendly Web site at”

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $45.8 billion in 2009 in discovering and developing new medicines. Industry-wide research and investment reached a record $65.3 billion in 2009.

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