…Generics. The annual rate is, in fact, at the lowest point in the three decades since the Labor Department began using its current method of tracking prescription prices. The rate over the last 12 months is just 1 percent, according to the latest data, released Wednesday. As recently as 2005, inflation was running at an annual rate of 4.4 percent, The New York Times writes.

“The way the index is going, it looks like drug price increases are not going to be very painful this year,” says Dan. Ginsburg, a supervisory economist at the Bureau of Labor Statistics who is involved in compiling the Consumer Price Index, tells the paper. Generics made up 63 percent of prescriptions dispensed in the US in 2006, up 13 percent from 2005.

Economists trace the slowdown to greater use of generics, including new copycat versions of some widely used pills, such as the Zocor cholesterol fighter, the Ambien sleeping pill and the Norvasc blood pressure drug. Then there’s the year-old Wal-Mart effect - generic prescriptions for $4 a month. Target quickly announced a similar plan, and Kmart expanded its program, offering a 90-day supply of generics for $15.

But before one gets too excited consider that the government still expects drug spending to rise to nearly $500 billion a year within a decade, up from an estimated $275 billion this year, the Times writes. That will happen as more people take more drugs; the boomers continue to age and those behind them get older, of course, and as new drugs are introduced. And don’t overlook the rising costs of cancer treatments and biologics. Just look at last year - overall spending rose 8.3 percent, according to IMS Health.