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Why are pharmacy acquisition costs and consumer prescription drug price indices apparently diverging?

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  • Carolyn Wolff
  • Randall Lutter

Abstract

Pharmacy acquisition costs for prescription (Rx) drugs have been trending below levels implied by the Bureau of Labor Statistics' (BLS) Consumer Price Index for Rx drugs, with the divergence higher when generic approvals are high. Dropping the first 6 months of generic sales from price indices calculated from pharmacy acquisition costs eliminates most of the difference between such indices and BLS indices.

Suggested Citation

  • Carolyn Wolff & Randall Lutter, 2020. "Why are pharmacy acquisition costs and consumer prescription drug price indices apparently diverging?," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1721-1727, December.
  • Handle: RePEc:wly:hlthec:v:29:y:2020:i:12:p:1721-1727
    DOI: 10.1002/hec.4165
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    References listed on IDEAS

    as
    1. Richard G. Frank & Andrew Hicks & Ernst R. Berndt, 2019. "The Price to Consumers of Generic Pharmaceuticals: Beyond the Headlines," NBER Working Papers 26120, National Bureau of Economic Research, Inc.
    2. Crystal G. Konny & Brendan K. Williams & David M. Friedman, 2019. "Big Data in the US Consumer Price Index: Experiences and Plans," NBER Chapters, in: Big Data for Twenty-First-Century Economic Statistics, National Bureau of Economic Research, Inc.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 7th December 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-12-07 12:00:03

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