September’s Producer Price Index rose 0.3
percent, a significant pick up. However, prices for most health goods and
services grew slowly, if at all. Eleven of the 15 prices for health goods and
services reported grew slower than the headline PPI. The major exception was
prices for pharmaceutical preparations, which increased 1.2 percent, resuming a
trend which I had hoped
was breaking down. Further, prices of medicinal and botanical chemicals
dropped 0.7 percent. So, price increases for pharmaceutical preparations are
not coming from the ingredients.
However, over the last twelve months,
prices of health goods and services have increased faster than overall PPI,
which grew 0.7 percent. The tables are turned: 11 of 15 health categories experienced
larger price increases than PPI did. Pharmaceutical preparations continue to
stand out dramatically, having grown 8.1 percent. Nursing homes, for which
prices rose 2.4 percent, might replace drug makers as the whipping boy for high
health prices, but they have a long way to go.
See Table I below the fold:
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