Inflation: Over-the-counter drug prices leap year over year
Alongside other sectors of the consumer economy, nonprescription drug prices saw prices rise 9.3% year-over-year. The insurance industry, health insurance and auto insurance providers in particular, have been beset by inflationary challenges.
Yahoo Finance Health Reporter Anjalee Khemlani details the price trends for over-the-counter drugs, referencing a statement from Bayer (BAYRY) from its third-quarter 2023 in relation to how pharmaceutical companies are trying to offset inflation.
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Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
AKIKO FUJITA: Well, inflation remains a consistent issue for Americans. So we saw that in Tuesday's CPI report, one way it's impacting consumers is surging costs for over-the-counter drugs. Let's bring in our very own Anjalee Khemlani to give us the details.
Anjalee, we were just talking about insurance rising as well. But what's behind the gains that we have seen with some of these drugs?
ANJALEE KHEMLANI: Yeah. So surprisingly, we saw over-the-counter or non-prescription drugs see a year-over-year surge of 9.3%, which you just saw on your screen. And that is because, in large part, due to-- and this is going to sound funny and redundant, but inflation itself. That has been one of the underlying reasons that some providers gave me.
So if you see on your screen right now, the non-prescription number 9.3% year over year. Meanwhile, prescription drugs, you know, such a big conversation around that when we talk about branded drugs and the inflation that you typically see there, the spikes in prescription drug pricing just 0.3% year over year. And it's important to note that actually, from a January to February alone, the jump for non-prescription was just 0.4%.
So the big jump happened over the last year, and that is really a result of things like increased demand, manufacturing labor costs, as well as inflationary pressures. That's what some of the makers of these over-the-counter medicines, as well as pharmacies, have said in the last year. You've seen it pop up in earnings reports over the past year, that they're contending with some of these issues.
Take a look at Bayer in their Q3 statement last year, saying, quote, "We were able to offset the decline in volumes and inflation driven rise in costs thanks to our continuous cost and price management efforts." So there you have it very clearly saying that prices had to rise.
We have seen in recent reports, especially end-of-year and Q4, that those inflationary headwinds are starting to relax, including because of the investments made maybe in increased manufacturing in the labor there. So we should be seeing that sort of taper off in the next couple of months or so, but all eyes on that just to see how it goes.
RACHELLE AKUFFO: And I certainly hope so, just in time for allergy season as well. Appreciate you as always. Our very own Anjalee Khemlani.
