Posted on 11/05/2019 9:29:40 AM PST by ransomnote
While the media continues to claim prescription drug prices are rising, a recent Council of Economic Advisers (CEA) paper shows the opposite: Under President Trump, prescription drug prices are decreasing at rates not seen since the 1960s.
In the eight years prior to President Trump’s inauguration, prescription drug prices increased by an average of 3.6 percent per year. Fast forward to today, and prescription drug prices have seen year-over-year declines in nine of the last ten months, with a 1.1 percent drop as of the most recent month. In June 2019, the United States saw the largest single-year drop (2.0 percent year-over-year decline) in prescription drug prices since 1967.
The media’s narrative about rising drug prices, while perhaps true for individual drugs or certain classes of drugs, is not true for general drug prices due to limitations in frequently cited reports. These misleading reports make broad claims even though they consider only narrow measures like list prices, brand name drugs, or drugs with recent price increases. Additionally, some reports use unknown methodologies (see the Appendix of CEA’s paper for more details about other reports’ flaws).
List prices do not reflect actual costs because drug manufacturers can increase list prices while simultaneously decreasing costs for insurers and consumers through discounts and rebates. Similarly, exclusively focusing on brand name drugs misses the cost savings equally effective generic drugs offer. And only measuring the average price of drugs that recently increased in price completely and conveniently ignores any drugs that had prices remain constant or decline.
To avoid these common mistakes and accurately measure average prescription drug prices, CEA relies on the prescription drug component of the Consumer Price Index (CPI-Rx), which is the best available measure of overall price changes for retail prescription drugs. The CPI-Rx and the broader CPI are produced by the Bureau of Labor Statistics, an independent government statistical agency, using fully transparent and extensively studied methods. Additionally, the broader CPI is a widely accepted measure of overall inflation. Even though CPI is the preferred method for measuring inflation, it still has some flaws. If anything, CPI-Rx overstates price growth because it does not fully capture the value that newer and more effective drugs provide patients. The current magnitude of this shortcoming is unknown, but it has previously been estimated to be as high as two percentage points per year.
Enhanced competition from generic drugs is an important factor behind falling prescription drug prices. Generic drug approvals reached a record high last year, due in part to FDA reforms, even though patents are expiring at a lower rate. Lower-cost generic versions of many brand name prescription drugs are widely available, and generic drug prices often decrease over time. Moving forward, additional generic drugs entering the market will continue putting downward pressure on drug prices.
Government data on prescription drug prices clearly show that the Trump Administration’s policies are helping drive historic, much-needed cost decreases. Lower prices mean American patients are better able to afford the medication they need, which should improve health outcomes. But there is more work to be done, and the Trump Administration is working on additional reforms to further lower prescription drug prices. As debates over making prescription drugs more affordable continue, it is critical that the public and policymakers understand what the most reliable data show.
Democrats Outraged!!!
This will clearly be the lead story on all of the nets tonight. S/OFF
Democrats, Trump is trying to kill the drug industry.
IMO, another significant factor is retail competition which has been [forced] to come about by buyer’s easy access to comparative pricing - something that was well near impossible a few years ago.
Recall when you couldn’t get the final price from the retailer until after they filled the script? You couldn’t call 5 stores and say I want drug XX and my insurance is YY. “I’m sorry sir, we don’t know the price until we fill it and ins tells us the contracted price”.
GoodRX sparked competition for cash prices which I believe has also had downward pressure on prices via your drug insurance. It’s easy to price shop now. Also, this has caused the major retailers to start their own prescription clubs which can made a serious difference.
Even if you don’t need it, you are foolish to not get a Part D plan because if you wait till years down the road you will pay a *huge* mandated penalty for not carrying it all along. It is the same as Medicare Part B in that respect (a friend did not get Part B and when she went to get it years later the penalty TRIPLED her Part B premium). We don’t need Part D now, but carry the absolute cheapest policy offered just for that reason. Between GoodRX, Sams Plus and Kroger prescription club we don’t use any insurance for drug purchases. Cheaper without insurance.
Your friend must have gone without Part B for a LONG TIME.
" Your monthly Part B premium will go up 10% for each full 12-month period that you could have had Medicare Part B but did not take it."
About 22 years as I recall.
There was also (I think) a flat one time penalty included. Can’t swear to it, though.
She passed away last year. Very nice lady, I miss her. We were friends for about 40 years, since we became neighbors in the late 70s back in Florida.
From my personal experience this is BS. 2019 was the worst year since I’ve been keeping records of increased Part D price increases on generic drugs. Next year’s insurance has added $800 of deductibles before the plan [Silverscript] kicks in for Tier 3 drugs.
Fake news has nothing on these guys....
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