The most recent data from the Bureau of Labor Statistics (BLS), which came out last week, shows that drug prices are rising more slowly than inflation. This led the Wall Street Journal Editorial Board to criticize the Senate’s proposed plan for setting drug prices.
Prescription medicine prices increased by 0.1 percent from May to June, while total costs increased by 1.3 percent. Overall costs rose 9.1 percent last year, while prescription drug prices rose 2.5 percent.
Other health expenditures rose faster as well; for example, according to the Wall Street Journal, health insurance outpaced inflation in June, rising at a 17.3 percent annual rate.
According to a January Congressional Budget Office report, per capita spending on prescription drugs began to level off in real terms in the mid-2000s. “Since that time, such spending has fallen as a percentage of total spending on health care services and supplies,” the report says.
But for some reason, drug companies are being targeted for health care cost increases. Politicians are thinking about a plan that would let Medicare decide how much prescription drugs cost.
“There is no negotiation,” writes the WSJ Editorial Board, referring to the proposal’s 95 percent tax on pharmaceutical firms that do not comply with government demands, as well as the lack of an appeals process. “The deal would discourage investment in new treatments.”
BIO agrees with the editorial viewpoint. BIO President and CEO Dr. Michelle McMurry-Heath says that the drug pricing proposal would make it much harder to make important investments in future research and development. This will slow down the development of new medicines and hurt patients.
“We will not achieve health equity without a robust pipeline of new cures. And that pipeline is already beginning to dry up because of the cumulative impact of this administration’s relentless assault on our industry. “, says Dr. McMurry-Heath.