President Donald Trump has long promised to do what he can to help reduce the cost of prescription drugs and according to a recent report from the White House Council of Economic Advisors (WHCEA), that is yet another area where the president has made good on his vows.
Breitbart reported that the latest WHCEA report indicated that prescription drug prices have fallen by at least 11% since President Trump took office, reversing the trend of steadily increasing prices during the prior administration.
Prescription drug prices down
In the chapter of the lengthy report that dealt with the Trump administration’s deregulatory actions and the impact those reforms have had on boosting economic growth was a small subsection focused on consumer and small business savings on healthcare, with particular attention paid to the cost of prescription drugs.
On page 123 of the report, the WHCEA wrote, “Prescription drug prices outpaced general inflation for decades; but in the past two years, they have fallen more than 11 percent below the previous trend as of May 2019, and below general inflation.
“In 2018, prescription drug prices even declined in nominal terms over the calendar year for the first time since 1972,” the report continued.
More generics, greater competition
The report largely attributed the reduction in prescription drug prices to two main actions taken by the Trump administration’s Food and Drug Administration (FDA), namely the 2017 Drug Competition Action Plan and the 2018 Strategic Policy Roadmap, both of which worked to encourage greater choice for consumers as well as price competition among pharmaceutical companies.
“Under these policies, the FDA has approved a record number of generic and new brand name drugs to compete against existing drugs (CEA 2018b),” the report read.
“We estimate that the results of these actions will save consumers almost 10 percent on retail prescription drugs, which results in an increase of $32 billion per year in the purchasing power of the incomes of Americans (including both consumers and producers),” the document added.
In other words, fewer regulations have resulted in more new drugs being approved, both generic and name brand, which has spurred on competition among the pharmaceutical companies and has led to lower prices for consumers, placing more money in their pockets to be spent on other things that help boost the economy.
Trump not done yet
Later in the report, in a chapter devoted to the ways in which choice and competition are promoted by a free-market health care system, there was another small subsection that discussed the on-average decline of the cost of prescription drugs as measured by the Consumer Price Index, which showed a year-over-year decline in average drug prices in 9 of the last 11 months.
Again, a substantial part of that average decline in drug prices is a direct result of the administration’s policies encouraging innovation and faster approval of generic drugs, and their increased prevalence on the market, all of which works to counter the higher prices routinely seen for new name-brand drugs or rarely-prescribed specialty prescriptions.
While this is good news in and of itself, Breitbart noted that President Trump is likely not done yet, as he has continued to discuss other ways to help reduce the cost of prescription drugs and has encouraged Congress to join him in that effort with legislation that, hopefully, will lead to even further reductions in prescription drug prices for Americans.