New Data on Prescription Drug Prices and Inflation
By: Colorado BioScience Association Date: 12/09/2022
Prescription drug prices lag inflation, according to new information from the Altarum November 2022 Health Sectors Economic Indicators Briefs. With inflation top of mind for policymakers at the state and federal level, the new report provides important data for our industry about the key drivers of healthcare costs.
Overall inflation is far outpacing healthcare costs, especially the costs of prescription medicines. The report reveals prescription drug price growth was 2.2%, after declining the previous year by 0.7% in October 2021. In contrast, overall Consumer Price Index (CPI) inflation was 7.7% in October 2022 (year over year).
Healthcare Categories with Price Growth Above the Healthcare Price Index (2.9%)
- Dental care (5.4%)
- Nursing home care (4.2%)
- Hospital services (3.5%)
Healthcare Categories with Price Growth Below Healthcare Price Index (2.9%)
- Prescription drugs (2.2%)
- Physician services (0.3%)
The Altarum analysis shows that commonly held perceptions about prescription drug costs are not consistent with the data. Overall, health spending growth continues to lag GDP growth and healthcare price increases remain moderate amid slowing economy-wide inflation. Additionally, the healthcare sector continues to create jobs in the midst of constant news about layoffs in other industries. Healthcare job growth remains strong.
Why It Matters
This is important to take keep these indicators front and center in conversations about inflation and with drug price controls taking effect in 2023 as part of the signed Inflation Reduction Act. CBSA will continue to educate the Colorado Congressional Delegation and state policymakers about the importance of the life sciences industry and the reality of prescription drug costs compared to overall inflation.
We will continue to speak out against government price setting on prescription medicines because these policies negatively impact innovation. CBSA advocates for policies that improve coverage, allow patients to receive groundbreaking treatments, and return savings directly to patients. CBSA is committed to advancing policies that increase affordability for patients while supporting a pro-innovation environment for life sciences in Colorado.
* Altarum releases a monthly Health Sector Economic Indicators (HSEI) briefs that analyze the most recent data available on health sector spending, prices, employment, and utilization.