Reduction in the price of prescription drugs is a rare event. Several factors could be responsible for a decline in prices that affects the overall pharmaceutical industry. The US witnessed 1% reduction in the prices of prescription drugs in 2018, as revealed by the government. Despite the modest decline in prices, it holds significance for the US pharmaceutical industry. This is because reduction in drug prices observed for the first time in 45 years across the US.
The Federal Department of Health and Human Services revealed several details about this decline in its annual report. The report also enunciates healthcare spending of the nation. The next decade is expected to witness key changes in the pharmaceutical sector of the US.
Decoding Prominent Trends of the Pharmaceutical Industry
It is important to understand that the drop in prices pertained to pharmacy prescriptions. These prescriptions are different from the ones administered across clinics and hospitals. Prices of prescription drugs declined by 0.2% in 1973, and had not declined post that until last year. The need to manage cost of prescription drugs in the US has been a matter of discussion. Hence, the price drop has come at a crucial juncture in the history of US pharmaceuticals. The report finds that the healthcare spending in the US grew by 4.6% in 2018. This is an important consideration for analysts looking to decode the dynamics of the US pharmaceutical industry.
Understanding the Impact of Price Drop
The geriatric population is the largest consumer of medications in the US. Hence, the price drop could benefit this population demographic. However, the US government is closely analyzing the impact of decline in prices on the pharmaceutical industry. Medicare recipients would take the center-stage as improvements in pharmaceutical industry gather swing.