Drug Prices Falling at Record Rates

Prescription drugs are suddenly bucking a decades-long trend. New government data show prescription prices dropped 0.8% in July and are now 3.1% lower than a year ago, the sharpest annual decline in more than 60 years, per Axios. Broader medicinal drug prices also experienced the largest annual drop on record, falling 2.7%, reports the Washington Post. The shift comes even as hospital and doctor bills keep climbing.

The Trump administration is claiming credit, pointing to its TrumpRx discount site and deals with Eli Lilly and Novo Nordisk that lowered cash prices for popular GLP-1 drugs and expanded Medicare coverage. But health economist Geoffrey Joyce says the bigger driver is Medicare's new power under the Biden-era Inflation Reduction Act to negotiate prices on 10 high-cost drugs—some cut by up to 79%, per Axios. Those price reductions took effect Jan. 10. Economists also cite market shifts, including the ongoing move from brand-name blockbusters to cheaper generics.