![Fact of the Week: The Price of Drugs Has Increased 40 Percent Less Than the Average US Product](https://cdn.sanity.io/images/03hnmfyj/production/86f6dbce913575f90aa48e1748ad619c31e3c06b-4184x630.png)
Fact of the Week: The Price of Drugs Has Increased 40 Percent Less Than the Average US Product
Sources:
- U.S. Bureau of Labor Statistics, “Producer Price Index by Industry: Pharmaceutical and Medicine Manufacturing [PCU32543254]”, retrieved from FRED, Federal Reserve Bank of St. Louis, Accessed August 22, 2024.
- U.S. Bureau of Labor Statistics, “Producer Price Index by Commodity: All Commodities [PPIACO],” retrieved from FRED, Federal Reserve Bank of St. Louis, Accessed August 22, 2024.
Commentary: Despite popular rhetoric around the supposedly exorbitant prices of prescription drugs, the price of pharmaceutical products has increased far slower than the rate of inflation, according to the producer price index (PPI) released by the Federal Reserve. The PPI, which assesses the average change in prices that U.S. producers receive for their goods and services, shows that, since 2017, the price of drugs in the United States has risen by 22 percent, with an average growth rate of 2.6 percent per year. Comparatively, the price of all commodities has risen by 35 percent or 4.2 percent per year. The data means that, over the past seven years, the price of drugs has increased 40 percent less than the average U.S. product. It’s yet one more data point rebutting the contention that American drug prices have skyrocketed in recent years.