On Friday, January 11, 2019, the White House Council of Economic Advisors tweeted two points regarding the declining price of medicine in the United States.
The first tweet noted that the “prices for prescription drugs fell 0.6% during the 12 months 2018. This is the largest decline in prescription drug prices in almost half a century (46 years).”
The second tweet discussed inflation, stating that “adjusted for general inflation, the prices for prescription drugs fell almost 3% (about 2.8%) during the 12 months 2018.”
The two tweets came during a Twitter thread discussing the Consumer Price Index (CPI), an important measure of inflation. The thread highlighted the fact that the CPI increased 2.2% over the past twelve months, which is in line with market expectations and that inflation remains in the target range.
These tweets are additional support for the fact that medicine costs are growing at the slowest rate in years, a topic we have discussed on multiple occasions. In one such article, we discussed claims by the Department of Health and Human Services (HHS) that there were 60% fewer price increases on branded drugs than in 2017 and 54% more decreases on the cost of generic and brand-name drugs when compared to 2017.
In another article we recently posted, 2017 showed a slower growth rate in overall national health spending than 2016. In 2017, overall national health spending grew at a rate of 3.9 percent, nearly one who percentage point slower than 2016 growth. This included overall healthcare spending slowing for the three largest goods and services categories: hospital care, physician and clinical services, and retail prescription drugs.
With drug prices remaining front and center, however, it will be interesting to keep an eye on the progress to see if prices continue to decrease (or grow at a slower rate).