More evidence surfaced last week showing prices for life-saving medications are declining. Based on data from Sector & Sovereign Research, STAT News reported that wholesale and net drug prices trended downward in the second quarter of 2019.
Specifically, net prices – prices after certain allowances are taken into account – actually fell 5.8 percent in the second quarter of 2019. (That decline followed a 6.1 percent drop in net prices in the second quarter of 2018.) Wholesale prices for brand-name drugs rose 3.1 percent in the second quarter, down from a 4.6 percent increase in the second quarter of 2018.
The Sector & Sovereign report comes after a May 2019 study by IQVIA that noted net medicine spending was $1,044 per person in 2018 – only $10 (0.9 percent) more than patients paid in 2017. The slight increase is for good cause. IQVIA said the small rise “was largely driven by more patients receiving existing branded drugs and using newly launched drugs.”
As PhRMA explained, the IQVIA report also found “prices for brand medicines with patent exclusivity grew just 0.3 percent in 2018, slower than the rate of overall inflation” and “prices for brand medicines are projected to fluctuate between a decline of 1 percent and a modest increase of 2 percent annually over the next five years” even though innovation is expected to continue to flourish.
The IQVIA report also examined how much individual Americans pay for the medicines they need. It found real net per capita spending has grown by only $44 per person per year since 2009. Additionally, while headlines and lawmakers on Capitol Hill make it seems as if millions of Americans are drowning in drug costs, IQVIA found only 8.8 percent of Americans pay more than $500 a year from their medication. Additionally, “commercially insured patients increasingly use manufacturer coupons to offset their initial cost exposure, and average final out-of-pocket costs remained at $42 per brand prescription.” (Almost one in five commercially insured patients used manufacturer coupons to lower their drug costs in 2018.)
That’s not all. A January 2019 Altarum report found drug prices increased 1.6 percent in 2018, the slowest rate since 2013. Between December 2017 and December 2018, drug-price growth declined 0.6 percent, the lowest year-over-year rate in 45 years.
Don’t believe private sector reports?
After the federal government released its consumer price index for February 2019, MarketWatch reported, “prescription drug prices aren’t rising — they’re falling for the first time in 47 years.” Five months later, the U.S. Bureau of Labor Statistics announced in August 2019 the price index for prescription drugs declined slightly, falling 0.2 percent. (Nonprescription drug spending rose 1.6 percent year-over-year while the index for hospital services rose “sharply” – 1.4 percent.)
Once again, almost any method of slicing the data shows headlines about rapidly increasing drug prices are overblown.