Tag: "drugs"

CPI: Medical Prices Rose Three Times Faster Than Other Prices; Hospitals Stand Out

BLSOctober’s Consumer Price Index (CPI) confirms medical prices continue to spring ahead of prices for other goods and services. Overall CPI increased 0.2 percent on the month and also 0.2 percent, year on year. Medical prices, on the other hand, increased 0.7 percent on the month and 3.0 percent, year on year (Table I).

20151117 CPI

PPI: Health Prices Continue to Rise Faster Than Others

October’s Producer Price Index declined 0.4 percent, month on month, and dropped 1.6 percent, year on year. Mild deflation continues to take hold in the general economy. However, it is not so in health care. Of the 14 sub-indices for health-related goods and services, only three declined month on month. Only six declined year on year (see Table I).

20151113 PPIa

CPI: Deflation Except In Health Care (Again)

I admitBLS this is getting a little repetitive, but it is not my fault the Bureau of Labor Statistics (BLS) releases the Consumer Price Index one day after the Producer Price Index. The CPI confirms (once again) the price behavior indicated by yesterday’s PPI.

While consumer prices were down 0.2 percent, month on month, and flat year on year, medical prices increased 0.2 percent and 2.5 percent (Table I). However, prescription drugs experienced quite moderate price increases last month. This means that while prices of medical goods and services overall increased, month on month, there was no sticker shock versus the CPI. Unfortunately, yesterday’s PPI suggests that price increases are flowing through the system again, and we can expect to see a pick-up in health prices versus overall inflation, in future CPIs.

PPI: Deflation Except in Health Care

BLSSeptember’s Producer Price Index declined 0.5 percent, month on month, and dropped 1.1 percent, year on year. A mild deflation appears to be taking hold in the general economy. However, it is not so in health care. Of the 14 sub-indices for health-related goods and services, only five declined month on month. Only three declined year on year (see Table I).

20151014 PPI

Consumer Price Index: Amid Disinflation, Medical Prices Increasing

BLSYesterday’s Consumer Price Index (CPI) release confirmed prices of medical goods and services continue to rise at a steady pace, despite the general deflationary environment. The CPI declined 0.1 percent from July to August (seasonally adjusted), and increased just 0.2 percent in the last twelve months.

Much of the disinflation is caused by dropping energy prices. Excluding food and energy, the CPI increased 0.1 percent last month and 1.8 percent over the last twelve months. Medical care, although flat last month, increased 2.5 percent over the last twelve months (see Table I). This is moderate by historical standards, but still excessive relative to current CPI.

PPI: Gap in Hospital Inpatient & Outpatient Prices

BLSAugust’s Producer Price Index was flat, month on month, and dropped 0.8 percent, year on year, continuing the trend we saw last month. Producer prices for health goods and services are rising faster than other producer prices (see Table I).

20150911 TI

Health-Related Producer Prices Tame in July

BLSThe Producer Price Index (PPI) for July increased more than expected, but was still benign. Health-related producer prices were tame last month.

Prices for pharmaceutical preparations, which have increased faster than other producer goods in the long term (rising 9.4 percent since July 2014), finally turned around and actually dropped 0.4 percent last month (See Table I). This was a bigger decline than prices for all final demand goods (-0.1 percent) or for all final demand (0.2 percent).

Producer Price Index: Pharma, Biologics Jump

The Producer Price Index (PPI) for June increased more than expected, as the effect of the drop in oil prices abated. As shown in Table I, producer price growth for health goods and services was in line with tame growth in overall PPI, which grew 0.4 percent on the month and dropped 0.7 percent on the year to June.

The exceptions were pharmaceutical preparations, which increased 2.5 percent on the month and are up 10.3 percent on the year; and biologic products (including diagnostics), which increased 3.1 percent month on month and 3.2 percent year on year.

Producer Prices: Health Goods & Services Lag

Last Friday’s Producer Price Index showed a jump from April to May of 0.5 percent (seasonally adjusted). When I last looked at the PPI, it looked like prices of health goods and services were outpacing other producer prices.

The latest data show them lagging (see Table 1). Although, looking at year-on-year data, pharmaceutical products, hospitals, and nursing homes have had relatively high price increases. Price inflation for health insurance has been moderate, according to the PPI.

Drug Shortages Getting Worse

Robin Miller, a 62-year-old oncologist in Atlanta with bladder cancer, was scheduled to receive a potentially lifesaving drug in December. But her doctor’s office called shortly before the appointment to say: “Sorry, we don’t have any. We can’t give it to you,” according to Dr. Miller.

The disruption was due to a global shortage of the drug, BCG, which arose after manufacturing problems at two of the few global suppliers. Without the drug, Dr. Miller feared her cancer would come back and she would have to have her bladder removed, a step she called “barbaric.”

The crisis illustrates the potentially grave consequences of a persistent problem in health care: drug shortages. The number of drugs in short supply in the U.S. has risen 74% from five years ago, to about 265, according to the University of Utah’s Drug Information Service, which tracks supplies. They range from antibiotics and cancer treatments to commodity items such as saline. (Peter Loftus, “U.S. drug shortages frustrate doctors, patients,” Wall Street Journal, May 31, 2015)

The U.S. government’s measures to mitigate this problem have failed because it has ignored NCPA’s conclusion that shortages result from too much, not too little control over the market for these drugs.

The government keeps tightening the screws on manufacturers, and the shortages keep growing.

See Devon Herrick’s testimony to the U.S. Senate in 2011 and my own study published in 2012.