President Trump asserted late Friday that drug prices declined for the first time in nearly 50 years, implying in a tweet that his administration’s efforts to speed generic drugs to market were responsible for that historic feat.
But in the context of America’s prescription drug market, the statement is both a non sequitur and demonstrably false.
Drug prices declined in 2018, the first time in nearly half a century. During the first 19 months of my Administration, Americans saved $26 Billion on prescription drugs. Our policies to get cheaper generic drugs to market are working!
— Donald J. Trump (@realDonaldTrump) January 11, 2019
A recent analysis of brand-name drugs by the Associated Press found 96 price increases for every price cut in the first seven months of 2018. At the start of last year, drug makers hiked prices on 1,800 medicines by a median of 9.1 percent, and many continued to increase prices throughout the year.
This is exactly how the govt measures increases and decreases. Is called baseline budgeting.
The BLS says prices for drugs declined slightly in 2018. So who to believe, Stat or the BLS?
The Bureau of Labor Statistics measure refers to net prices. The decline it records does not reflect list prices, which are rising and are the cause of the increase in patients out-of-pockets costs for medications. The decline in the BLS measure reflects the advent of copay accumulators, a tool insurers are using to shift more costs to patients and pharmaceutical companies. STAT’s Ike Swetlitz has written about the fallacy of relying on the BLS measure to claim a broad-based decline in prices. https://www.statnews.com/2019/02/07/trump-claims-drug-prices-have-fallen-but-hes-cherry-picking-that-data/
That’s a very understandable impression, but the CPI measures something different.
CPI focuses on the consumer (patient) price, but most patients have insurance. So that at-the-pharmacy price in the CPI doesn’t reflect what the manufacturer is charging Medicare. (Or whatever insurance company.) For the price increases made by drug-makers, the PPI would be more meaningful although it’s still murky.
The BLS’s own description:
And a clearer summary of the complications, though it’s from a political foundation so one should of course be mindful of their perspective:
If you want drug pricing to be reigned in, then stop stomping all over Trump. At least he is not afraid of risking his political career: he is speaking out, and not sticking his head in the sand. He happens to be fighting a very worthy fight – people should not have to chose between food or the meds they need to stay alive (a ridiculous third-world situation in the Big USA). Your President is on to something very positive – he deserves applause, not scorn. The media are losing sight of this, very evidently. For Shame !!!
The problem with Trump, he says one thing and does another. He is completely untrustworthy. Not to mention- makes false claims on an hourly basis.
I wish you would forward this piece to the relevant editors of major news sources. People are struggling and even dying (consider the tripling of the cost of insulin) while the drug prices demanded by Big Pharm are rising, at best, faster than inflation and SS checks. 6% is more than 3x the 2018 inflation rate.
sorry, Trump was right this time, they have declined 0.6% year over year…this is from Friday’s CPI report:
scroll down about halfway to “Medical care commodities”
The BLS data do show a drop in prescription drug cost in the second half of 2018. Up till then the trend was pretty continuous for many years. We’ll see if this continues – if so the Trump administration should get some credit. Cost is way too high overall, so a considerable decrease is needed for many products (e.g. insulin).
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