Prescription drug prices recorded the biggest year-over-year drop in more than 60 years in July, a startling reduction experts chalked up to an array of factors, including more generics and discount GLP-1 weight-loss drugs.
While overall costs for medical services continued to rise, prices for medicinal drugs fell 2.7 percent over the 12 months ending in July, the largest annual drop on record, according to Bureau of Labor Statistics data released Wednesday. Prescription drugs, part of the medicinal drug category, fell by 3.1 percent, the steepest annual decline since March 1963.
The White House took credit for the good news, saying President Donald Trump’s efforts to slash drug prices were working. Some experts said a Biden-era policy that requires Medicare to negotiate prices for some popular prescription drugs is more likely to be driving down costs…
President Donald Trump has long pledged to bring down prescription drug prices, and the White House made the case Wednesday that the president’s pricing agreements with drug companies and a new initiative, the direct-to-consumer site TrumpRx, are responsible for the lower prices.
“No president in modern history has been able to drastically reduce prescription drug prices across the board except for President Trump,” White House spokesman Kush Desai said in an email. “This is a direct result of the President’s willingness to push the envelope with bold policies that actually put Americans and America First.”
White House officials pointed particularly to the costs of GLP-1 weight-loss drugs, which Trump calls the “fat drug.” TrumpRx, which launched earlier this year, offers GLP-1 drugs for as low as $150 for a starting dose. And under a Medicare pilot program that the administration launched in July, drugmakers Novo Nordisk and Eli Lilly agreed to charge the government just $245 a month for their products, Wegovy, Zepbound and Foundayo.
Monthly prices charged to insurance companies previously had topped $1,000. Trump and the drug companies began negotiating last year and announced the rough outlines of the deals in November.
“In a matter of months, we got up and running these discounts in a way that they were meaningful for American patients,” said a White House official, speaking on the condition of anonymity because administration staff are not authorized to speak publicly.
But bigger trends in the GLP-1 marketplace were already driving down prices independent of Trump’s negotiations, according to experts on drug pricing. Spotty insurance coverage for Wegovy and Zepbound for weight loss has produced enormous demand for lower consumer prices. And cheaper compounded drugs have posed genuine competition for the brand-name companies, adding even greater downward pressure.