The consumer price index for prescription drugs has fallen 2.3 percent from its peak in June 2018 through September 2019, according to an analysis of Bureau of Labor Statistics (BLS) data by President Donald Trumps Council of Economic Advisers (CEA).
This price drop, the fastest since the 1960s, has been aided by the quicker approvals of new and generic drugs by the Trump administration, according to the CEA.
Great news for American patients! Prescription drug prices FELL again last month and are now 2.3% below their peak. Increased generic drug approvals under @realDonaldTrump continue driving price reductions. Read our recent report on falling prices: https://t.co/9fUT3MhB2J pic.twitter.com/FYBqqH4Vmi
— CEA (@WhiteHouseCEA) October 10, 2019
The decline breaks a trend of price increases that have since 1970 only paused once, briefly, in 2013. Rising drug prices have been a major part of the growing health care costs for Americans, cutting into family budgets and fueling government debt.
Average annual new drug approvals increased by nearly 72 percent in 2017 and 2018, compared to the period 2008–2016, the CEA said in an Oct. 10 paper (pdf). Average annual generic drug approvals, meanwhile, increased by almost 70 percent.
“The rate of drug approvals increased in 2017 and 2018, due in part to policies of the Trump Administration to expedite the drug approval process,” the paper stated.
If the 2017–2018 rate of drug approvals continues, it will save consumers between about $79 billion and $109 billion by 2027, the CEA estimates, when compared to an estimate using the 2008–2016 approval rate.
The estimated benefits were even higher when CEA factored in the value of having more new, presumably better, drugs on the market.
Measuring Drug Prices
Gauging drug price movements can be complicated. The CEA paper criticized some media for using measurements that “can be misleading.”
Several media reported this year that prescription drug prices have been increasing in the first half of 2019 at a rate thats four or five times that of inflation.
The reports said that 3,400 drugs have higher prices in 2019, with an average price increase of 10.5 percent, citing a study by Rx Savings Solutions, a consultancy that claims to offer cost savings on drug purchases.
Why did the BLS report a price drop?
First, 3,400 drugs are only a fraction of the drug market and thus may not be representative of overall market conditions. Second, the number is inflated because it counted different dosages and strengths of the same drug as separate products, according to the CEA. Third, the measure is, by design, incapable of capturing any price cuts, since it only looks at drugs that have increased in price compared to the year before.
The Rx Savings analysis showed that fewer drugs—2,900—rose in price in the same period in 2018.
In addition, an analysis by the ARead More – Source