White House Report Touts CPI-Rx as Best Drug Price Tracker

A report from the White House Council of Economic Advisors on measuring prescription drug prices finds that the CPI Prescription Drug Index (CPI-Rx) prepared by the Bureau of Labor Statistics is “the best available summary measure” of the prescription drug price changes — but some groups claim the index is flawed because it leaves out new, expensive drugs.

The report notes a “discrepancy” between the CPI-Rx and media reports of rising drug prices and admits that the best measure of prescription drug prices “would be based on net prices and would reflect all discounts and rebates,” but says no such measure exists due to the shadowy nature of rebates.

But “according to the CPI-Rx, not only are drug prices increasing more slowly than general price inflation; in the most recent period, drug prices have been decreasing,” the report claims. “As of August 2019, the CPI-Rx has declined by 0.7 percent over the previous 12 months.”