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Flood Of Generics Brings Drug Costs Down

As more people turn to generic drugs and generic versions of some of the most common drugs come to market, the annual inflation in drug costs is 1% -- the lowest rate in the three decades, since the Labor Department began using its current method of tracking prescription prices.

In the past year and a half alone, generic equivalents have become available for the cholesterol treatment Zocor, the sleeping pill Ambien and the blood pressure drug Norvasc. According to the nonprofit Kaiser Family Foundation, in 2006, the average brand-name prescription cost more than three times the average generic: $111, compared with $32.

Another factor could be the so-called Wal-Mart effect, which began offering many generic prescriptions at $4 a month last fall. Other retailers have followed with their own variations. Publix--a grocery chain with 684 pharmacies--announced last month that it would not charge for prescriptions for seven commonly used antibiotics.

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