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Prescription Drug Price Plunging By Most On Record Keeps Tepid Inflation In Line With Expectations
If yesterday's rising PPI print suggested the Fed may continue its $10 billion a month taper at its next meeting, today's comparably rising CPI for December will likely mean that absent another payroll-like shock, the Fed will soon monetize "only" $65 billion per month. The reason: in December core consumer inflation rose by 0.3%, compared to the 0.0% change in November, and in line with expectations. Stripping away food and energy however, the increase was only 0.1%, also in line with expectations, and a decline from November's 0.2% increase. More importantly, on a Y/Y basis, core CPI was up by 1.7%, still shy of the Fed's 2% target but not too far.
This is where the BLS said the growth was:
Advances in energy and shelter indexes were major factors in the increase in the seasonally adjusted all items index. The gasoline index rose 3.1 percent, and the fuel oil and electricity indexes also increased, resulting in a 2.1 percent increase in the energy index. The shelter index rose 0.2 percent in December. The indexes for apparel, tobacco, and personal care increased as well. These increases more than offset declines in the indexes for airline fares, for recreation, for household furnishings and operations, and for used cars and trucks, resulting in the index for all items less food and energy rising 0.1 percent.
For those seeking the lack of inflation in food, the BLS suggests you look in the fruit section:
The food index rose slightly in December, increasing 0.1 percent. The food at home index was unchanged for the third time in four months, as a sharp decline in the fruits and vegetables index offset other increases. The food index has not posted a monthly increase larger than 0.1 percent since June
The full breakdown by component:
The narrative from the report:
Food
The food index rose 0.1 percent in December, the same increase as in November. The index for food at home was unchanged, although four of the six major grocery store food groups posted increases. The index for nonalcoholic beverages, which declined in November, rose 0.5 percent in December. The index for dairy and related products rose 0.4 percent for the second month in a row, while the indexes for meats, poultry, fish, and eggs and for other food at home both rose 0.3 percent. Offsetting these increases was a sharp decline in the fruits and vegetables index; it fell 1.5 percent as the fresh vegetables index declined 2.7 percent. The index for cereals and bakery products also declined, falling 0.1 percent. The index for food away from home rose 0.1 percent in December after a 0.3 percent increase in November.
Energy
The energy index rose 2.1 percent in December after falling in October and November. The energy index has now risen 0.2 percent over the last six months. The gasoline index, which fell 1.6 percent in November, rose 3.1 percent in December. (Before seasonal adjustment, gasoline prices rose 0.7 percent in December.) The fuel oil index also rose, increasing 2.4 percent in December. The electricity index rose 0.4 percent, its fourth consecutive increase. The only major energy component index to decline was the index for natural gas, which fell 0.4 percent, its third consecutive decrease.
All items less food and energy
The index for all items less food and energy rose 0.1 percent in December after a 0.2 percent advance in November. The shelter index rose 0.2 percent in December after a 0.3 percent increase in November. The rent index increased 0.3 percent, while the index for owners’ equivalent rent rose 0.2 percent. The index for lodging away from home fell 0.3 percent after rising in November. The apparel index rose 0.9 percent in December after declining in each of the three previous months. The tobacco index rose 0.6 percent and the personal care index increased 0.3 percent. The new vehicles index was unchanged in December, as was the medical care index. The index for medical care services rose 0.3 percent, but the index for medical care commodities fell 0.8 percent, as the prescription drugs index declined 0.9 percent. The airline fares index declined sharply in December, falling 4.7 percent after increasing in recent months. The indexes for recreation, for household furnishings and operations, and for used cars and trucks also fell in December.
But while the surge in gasoline prices was notable, despite the relentless din of empty CNBC chatterboxes pronouncing the plunge in gas prices, the biggest surprise was the collapse in prescrption drug prices, whichin December fell by the most on record. Thanks Obamacare!
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Viagra went down ?
Perhaps another of the greatest scams of the 20th Century...
Harvard MEdical School Study tells us that drugs NEVER REALLY EXPIRE, even years after their "expirey" dates....
http://www.health.harvard.edu/fhg/updates/update1103a.shtml
Do the math to see how sick the system is...
ori
Oh no, this is a national emergency, we cannot allow falling drug prices (in our crony-capitalistic system).
Bernanke must print more!
Expiration date is not medicine, is patient. If you are still take medicine after date on bottle, you are not cure and will die. Medicine is obvious not work.
Thanks for posting that. I've been telling my wife this for years. But she won't listen to me and throws away all vitamins, drugs, supplements right after the expiration dates. Maybe she'll listen to the Harvard Medical school -- maybe. Women can be highly illogical.
You cannot generalize this to all drugs, as some drugs are more susceptible to humidity, oxidation, light, and heat exposure than others.
Time destroys everything but at different rates depending on chemical structure/composition.
Also you cannot generalize about all women, as not all women use their medulla oblongata and amygdala when they think. Your wife is not a gold standard for representing of how women think.
Well yes and no. Most oral solid dosage forms are pretty stable. And most degradation products are harmless. But, unless you know the degradation profile and actual stability you are taking a chance. Of course, taking anything, even fresh is taking a chance.
The 1 year that is common with Rx drugs is absolutely BS though. Stability depends a lot on temperature and humidity.
Most companies will not spend the money to determine expirations over a couple years. Because they have to have data to back up their expiration, and that costs money.
pods
Some substance is differ radioactive half-life. For example, Cesium 137 is half life 31.7 year, Polonium 210 is half life 186 day. So, as "nutritional supplement" add to soup, must use Polonium 210 within about three month or must double dose. This is well document in KGB training manual, section on "Elimination of Dissident Disease".
It was true back in the day not to take old Tetracycline because the drug reacted with the capluse. But they have changed the formula of the capsule lining and the problem was solved.
Following the BLS logic of stripping out food and energy prices because they are so volitile should we not strip out perscription prices because of their volitility?
How about all medical care or rents? Oh, I see. They only go up so they aren't volitile.
I don't know what Drugs they are comparing. But the reality is at the cash register. One of the drugs I take used to cost $4.50 for 120 tabs. Now, a little over $500.00 bucks for the same item.
Somehow it got taken off the generic list. Hmmmm. Somehow.
Then there is the Diavan which goes up every month for two years now. Then there are two others I get now and then which are up over 200% in two years.
This is a dishonest report. What they should have said is sales are down. Not the price of drugs themselves.
The 5-6% postal rate hike effective Jan 26th should help this along.
Really?
My mother's prescriptions all increased over the past several months. Some of them increased over 100%. Sadly, she would rather take pills rather than eat a healthy diet and try to exercise and lose weight... 90% of Americans are the same way.
Personally, I will never take ANY of their prescriptive poisons.
Finally some good news...now I just need a reason to use some so that I can save money too.
I recently filled my 90 day prostate Rx - 'doxazosin mesy'. The price rose from $15.00 three months ago to $158.00 this time. My Doctor said that when she talked to the Pharmacist, he said that this weas widespread and that the Pharmaceutical Companies were taking advantage of the situation with ObamaCare to raise prices wherever they could.
So; where the hell does this statement of falling drug costs come from????????????
It's probably not reflected yet in these numbers. The "Affordable" Healthcare Act is jacking rising healthcare costs even higher. Congress is just doing their part to follow the inflation script and debase our currency.
my prescription drugs premium (via the govt system) increased 35% this year and in additon I now have a co pay.
the system is all gummed up and the more govt gets involved the more gummed up it becomes.
the entire system is breaking so why do we bother with details anyway?
I call bs on the prescription drug price decrease. Not that any of these numbers amount to anything close to truthfulness.
Does anyone still recall the total lies in the BLS just prior to Obama's reelection to get the unemployment number below 8%? Didn't think so and you know what is more outrageous is that nothing ever bad happens to the people promoting and telling the lies in our government.
Could anyone come up with a single exemple of a prescription drug having it's price reduced recently - I can't find any !? Sounds like a bogus data point !
When drugs lose their patent and get generic competition. Clairitin was another good example when it went from prescription to OTC.
"Harvard MEdical School Study tells us that drugs NEVER REALLY EXPIRE, even years after their "expirey" dates...."
Drugs have expiration dates because the law requires drug companies to keep samples of every batch until they expire. Having no expiration date would mean companies need to keep every sample of every batch they have ever made.
Didn't Lipitor recently go generic? If other major Rx patents recently expired, wouldn't that lower the price of the prescription drug index?
Bulletin: Prescription drugs less overpriced.
I am in the pharmacy business. This is the biggest bunch of BS I have read. Here are some examples.
Doxycycline our cost $20 for #1000 tablets ( less than 1 yr ago) now $1882.31 for #1000 tablets.
Nystatin/ triamcinolone cr $5 for 30 gms now $96.97 for 30gm
Oxycodone 30mg $24 for #100 now $95 for #100
desonide 0.05% cr $50 for 60gm now $233.42 for #60gm
There are so many of these types of increases in generic medications. We are explained by the wholesalers there is a ingrident shortage or the other generic makers were bought out or stop making the medications. All sounds BS !
Don't for get Donnatals owned by a private equity pharmacy. Every month it sees 20 to 30 dollar pops for 120 tabs. Used to be Generic.
Great truths "student of life".
This sounds like something that they made up months ago. There were stories that some major drugs were ending their patent protection - meaning they could go to generic versions. Thus, someone guessed that the drug prices were down. As other have posted, this does NOT mean that current generic drugs are cheaper - they are not. I also wonder why a drop in price of a few big name drugs is not offset by the rising costs to afford Obamacare coverage. But perhaps they use some type of calculation that figures out that you are getting more coverage and that means Obamacare is deflationary...
I think the drop is that there must be patents expiring with new generic competition and there's no new huge blockbuster like a Lipitor or Prozac where everyone was flocking to these products now.
Hey ZH'ers this is very important to understand. Jacking CPI to make it look ok is part of the scam. The objective here is to increase money supply to bolster bank balance sheets, but really it's just stealing via counterfeiting. If CPI can have some losers, that means that they NEED bubbles! BTW this gets easier with plummeting money velocity. They are fine with velocity going to zero, they need bubbles, and they will find some sector to destroy in order to jack the appearance if CPI (ahem coal).
The price of cannabis in Northern California has been dropping steadily the past few years. There is a lot of competition, more clubs and more home growers. You can buy an ounce of very smokeable grass here for the cost of an eighth in, say, Iowa. What a carry trade but you need to be able to distribute and that's the problem for gentleman traders.