Prescription drug prices lag behind increases in prices for hospital and health professional services in 2003 and 2004.

According to the Department of Labor’s Bureau of Labor Statistics, for the 12 months ending December 31, 2004 the Consumer Price Index (CPI) increased by 3.3 percent led by a 16.6 percent increase in energy costs. During this period medical care costs rose 4.2 percent.

The increase in prices for medical care were led by a 5.2 percent increase in the costs for hospital and related services and a 4 percent increase in the costs of health professional services followed by a 3.5 percent increase in prescription drug prices.

In 2003 the medical care index increased by 3.7 percent, led again by an increase in hospital and related services of 6.2 percent and a 2.8 percent increase in health professional services. By comparison prescription drug prices increased by 2.5 percent in 2003.

For the past two years prescription drug prices have attracted considerable political and media attention, yet during 2003 and 2004 increased prescription drug costs contributed less to increased medical care spending than did increased prices for hospital and health professional services.