A retired U.S. physician has written a blog, published Wednesday in Washington Policy Center (WPC), explaining whether prescription drug prices are increasing or decreasing.
Dr. Roger Stark, Senior Fellow, WPC Center for Health Care, says some politicians continue to claim that prescription drug prices are too expensive, calling for some type of price control.
The Democrats might have lost the battle over the Build Back Better (BBB) proposal, but the Biden Administration has been trying hard to reduce the prices of prescription drugs.
The Washington state legislature has created a drug-pricing committee, which will only deal with high-priced orphan-specialty drugs. However, this can open the door to price controls on most branded and generic drugs, Dr. Stark explained.
Some politicians and the Trump Administration claimed that prescription drug prices are actually decreasing, but what is the reality?
Dr. Stark wrote, “The entire scheme of drug pricing is very complex and can be viewed from several different perspectives.”
The U.S. Bureau of Labor Statistics began tracking the consumer price index (CPI) for prescription drugs in 1935, he explained. “The price of the tracked-drugs showed an average increase inflation rate of 3.34 percent between 1935 and 2022. This is high, however, the overall average increase in inflation for the same time period was 3.54 percent,” he wrote.
“In other words, based on the CPI, drug prices have increased at a lower rate than overall inflation,” Dr. Stark added.
He went on to explain that the CPI for prescription drugs has decreased in prices over the past few years. However, he said that the CPI only tracks a small number of prescription drugs.
Dr. Stark noted that another issue is the role of the Pharmacy Benefit Manager (PBM) in the purchase of drugs. PBM is a third-party administrator of prescription drug programs for health plans.
He wrote, “PBMs often determine the final price that patients pay for drugs. They set prices, offer rebates, and play a big role in getting drugs on hospital and insurance formularies. For example, Express Scripts is a PBM and published a report in 2018 on drug pricing for the 2017 year.”
“The company found that spending on common prescription drugs went down by 5.8 percent, however, spending on specialty drugs went up by 9.4 percent,” he added. “And the critical issue was that the specialty drugs accounted for 45 percent of overall drug spending.”
Dr. Stark said there are multiple other reports on escalating drug prices and at the same time, there are reports of decreasing drug prices. To know more about what he has to say on prescription drug prices, read the article titled “Are Prescription Drug Prices Going Up or Down?”