WASHINGTON, DC – Prices for prescription drugs edged down by 1% last year, a rare result driven by declines for generics and slow, low growth in the cost of brand-name medications, the government said Thursday.
Though modest, it was the first such price drop in 45 years, according to nonpartisan economic experts at the federal Department of Health and Human Services, who deliver an annual report on the nation's health care spending.
The price drop was for retail pharmacy prescriptions, not medications administered in hospitals or doctor's offices. HHS experts said the last time retail prescription drug prices declined was in 1973, when they went down by 0.2%.
The price drop comes amid questionable prospects for major legislation to curb prescription drug costs. Nonetheless, it was a nugget of decent news in a sobering, broader report on rising U.S. health care spending.
The HHS report found that spending on prescription medicines at pharmacies accounted for 9% of the total $3.6 trillion national health care tab in 2018. Total U.S. health care spending grew by 4.6% last year, averaging $11,172 per person. In the real world, U.S. spending is concentrated on the sickest patients, with 5% of the population accounting for half of costs.
Because of strong overall economic growth last year, health care spending as a share of the national economy declined slightly, from 17.9% in 2017 to 17.7%, the report found.
Legislation pending in Congress to curb drug costs would mainly benefit older people on Medicare, who are the biggest consumers of medicines.
House Speaker Nancy Pelosi is forging ahead with a floor vote next week on her bill authorizing Medicare to negotiate prices for the costliest drugs, including insulin. Under her bill, private insurance plans would be able to get Medicare's prices as well.