Tough Times Ahead for the Healthcare Sector?

According to a report published recently in Health Affairs, national health care spending grew at 6.1% in 2007 — its lowest rate of growth since 1998 — mainly as a consequence of slower spending on prescription drugs.

What’s more, IMS Health, a leading provider of market intelligence to the pharmaceutical and healthcare industries, reports that it has cut its estimate for growth of U.S. pharma sales to two percent or less this year … a significant decline from earlier forecasts of four to five percent.

The main causes of this deceleration in growth: fewer blockbusters, more competition from generics and consumers on a tighter budget.

But there’s no reason to throw a pity party for pharmaceutical and healthcare companies just yet. According to an article by Robert Pear in The New York Times, “In recessions, when the economy contracts, health spending usually continues to increase. “ Therefore, it’s likely that healthcare expenditures will increase their share of the nation’s GED during the tough economic times that lie ahead.