Consumer Price Index: Rx Prices Decline

Hard to believe, but prescription drug prices actually declined in May’s Consumer Price Index – down by 0.4 percent versus all-items CPI increasing by 0.2 percent and even medical care CPI increasing by 0.3 percent (Table I).

For the third month, prices for medical care increased in line with prices overall.  Medical equipment prices increased disproportionately (0.7 percent). However, it was health services, not goods, which showed strong price increases: Physicians’ and other medical professionals’ rates went up by at least one percent.

Over the last twelve months, prices of medical care, especially prescription drugs, increased significantly more than CPI overall, at 3.2 percent versus 1.0 percent. Nevertheless, prices of medical care have been slowing down. This is a good, but unexpected sign.