The recent Bureau of Labor Statistics (BLS) report that consumer prices jumped 4.2 percent in the 12 months ending in April fanned inflation fears already smoldering over supply chain disruptions, ransomware attacks and disappointing employment reports. Missing from the suspected causes of this spurt in inflation, however, are increases in prices of prescription drugs. This is remarkable since Congress is considering legislation aiming at limiting drug prices, which supporters have described as soaring or skyrocketing.
Inconveniently, prescription drug prices, in fact, have been falling. BLS data indicate consumer prices for prescription drugs in pharmacies and drug stores fell 1.8 percent in the 12 months ending April 2020, and this April were 3.1 percent below a peak in December 2019. Importantly, drug prices currently are similar to those of summer 2017, indicating negligible drug price inflation over close to four years.
Randall Lutter is a senior fellow at the Manhattan Institute.
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