Pinning Down Prescription Drug Prices
One aim the president and Democratic 2020 challengers share is the desire to bring down the price of prescription drugs. But is that already happening, or are prices still climbing? The two parties disagree, and it depends on how they’re measuring drug prices.
President Donald Trump has claimed, “Last year, for the first time in over 50 years, drug prices went down,” while Sen. Kamala Harris says on her website that pharmaceutical companies “increased drug prices by 10.5 percent over the past six months alone.”
The president is referring to a measure of what consumers and insurers pay at retail pharmacies (though it hasn’t been 50 years since that index dropped), and Harris is referring to list prices for a basket of drugs, according to their campaigns.
The problem with drug prices is that they can be measured in different ways, and there’s not one comprehensive measure of all prices, or alternatively, of what people, insurers and the government ultimately pay. There are rebates and discounts and behind-the-scenes negotiations, as well as common retail drugs, specialty drugs and physician-administered medications. The introduction of generics and how prescribing patterns change also impact what is spent.
“There is no measure that actually does what we’re talking about,” Joseph Antos, a health policy expert at the American Enterprise Institute, told us. There’s “no good measure of drug pricing trends.”
Richard Evans, founder and general manager of SSR Health, an investment research firm, told us the answer to whether prices have gone up or down depends on which drugs we’re talking about and at which point in the supply chain. “List prices are rising for brands, but the net prices are falling,” he said, with “net” meaning after rebates, discounts, coupons and fees are deducted.
SSR Health’s analysis captures
