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Executive Summary

Rx DRUG PRICES AT PRODUCER LEVEL RISE 3.5% IN FIRST HALF of 1988 and are up 7.3% over the 12 months from June 1987 through June 1988, according to the Bureau of Labor Statistics' producer price index data. Manufacturers' drug prices increased only .5% during the second quarter, representing a mediating trend from the 8-10% annual price inflation in recent years. The second quarter is historically a slow period for price changes. Hormones (up 10.6%), minor tranquilizers (up 9.2%) and sedatives (also up 9.2%) led other drug categories with the biggest price run-ups during the April-to-June three-month period, according to the Bureau of Labor Statistics data. Rx drug categories on track to finish 1988 with price increases of 10% or more include CNS stimulants (up 10.6% since the beginning of the year), anticonvulsants (up 9.3%), and minor tranquilizers. Rx drug prices for the second quarter were outpaced by medical bulk chemicals, which rose 2.5% for the three months. For the half, bulk medical chemicals increased 2.3% in price at the manufacturer level. In recent years, bulk prices have lagged finished product price inflation. Since June 1982, bulk prices have actually declined over 3%. Prices for biological products at the producer level gain only .4% during the second quarter, and 1.1% for the half. OTC drug prices were flat during the second quarter and have grown 3.6% since the beginning of the year.

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