Prescription drug prices keep skyrocketing outrageously – at least, that’s what’s constantly reported. And much of the evidence looks especially impressive: Politicians who normally agree on nothing have vowed to rein them in – including President Trump and Democrats of all stripes, including many of the party’s presidential candidates.
So imagine my surprise when I checked into these claims by examining the consumer price data issued by the U.S. Bureau of Labor Statistics each month. They show that these prices have actually fallen on net since December, 2017 (by 0.43 percent).
Moreover, these figures also show that prescription drug prices have fallen during the past year (through May, by 0.99 percent), and that they’re dropping even though the rate of overall inflation and core inflation (which strips out volatile food and energy prices) has been rising (year-on-year by 1.80 percent and two percent, respectively).
Nor has there been a notable increase in prescription drug prices during this calendar year. From January through May, they’ve risen by 0.16 percent. But that’s still considerably less than the overall inflation rate (0.98 percent) and the core rate (0.51 percent).
That’s not to say that there hasn’t been a prescription drug price problem. For example, from May, 2017 to May, 2018, their prices rose by 3.71 percent – much faster than the overall inflation rate (2.74 percent) and the core (2.22 percent).
Moreover, during the last 27 months of the Obama administration, prescription drug prices increased by 11.14 percent, versus 2.67 percent for overall inflation, and 4.78 percent for core inflation. During the first 27 months of the Trump administration, however, these numbers are 2.07 percent, 4.59 percent, and 4.37 percent.
Americans still pay lofty prices for prescription drugs, and especially compared with consumers in other wealthy countries. It’s also important to point out that drug pricing is complicated. (Here are some of the reasons.) And I confess to having no idea why this pricing has been weak lately, and whether the decline will continue.
But when one of the country’s leading measures of inflation is saying that prescription drug prices have been going down, that should be pretty newsy. Even if “everyone knows” they’re soaring.