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Executive Summary

Rx DRUG PRICES AT PRODUCER LEVEL GROW 3% IN FIRST QUARTER based on data from the Bureau of Labor Statistics' Producer Price Index. The first quarter increase indicates a moderating trend from 1987 when the first quarter producer price index for prescription drugs increased 4%. Although the December through March producer price figures are still preliminary, the 3% price increase is the smallest first quarter producer price run-up for prescription drugs in the 1980s, according to Bureau of Labor Statistics' data. With drug prices generally increasing 9-11% annually through the 1980s, first quarter producer prices for prescription drugs have historically risen 4% to 4.5%. The exception was 1984, when Rx drug prices at the producer level grew 3.7%. Drug categories showing the biggest first quarter price gains, according to the Bureau of Labor Statistics, were hormones (up 14.4%), CNS stimulants (up 8.7%), Rx cough/cold preparations (up 7.5%), vasodilators (up 6.6%), adult Rx multivitamins (up 6.4%), and Rx analgesics (up 5.3%). Despite showing the biggest price gain during the first quarter, price increases for hormones have not been steady, according to the Bureau of Labor Statistics. If the producer price index for hormones is considered for the four month period from November to March, prices rose only 1.3% Diuretic and anti-arthritic price declines during the first quarter indicated little pricing flexibility in these markets. The Bureau of Labor Statistics' figures show anti-arthritic prices at the manufacturer level falling .7% while diuretic prices edged down .6%.

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