Drug prices fell for the third straight month in May, delivering measurable evidence that President Trump’s push to lower costs at the pharmacy counter is working, according to government data released Wednesday.
Prescription drug prices declined 0.9 percent in May, bringing the three-month cumulative decline to 2.39 percent since February. Over the past year, prescription prices are down 2.0 percent. Over-the-counter medications fell 0.8 percent in May, for a three-month cumulative drop of 2.68 percent and a year-over-year decline of 2.5 percent.
The sustained decreases mark a notable shift in a category that has long frustrated consumers and policymakers alike. Lowering drug prices has been a central promise of the Trump administration, which has pursued a Most Favored Nation pricing strategy aimed at ending the practice by which other wealthy nations pay substantially less for the same medications than American consumers.
The over-the-counter figures may be the most telling detail in the data. Unlike prescription drugs, OTC medications sit outside any government price-setting mechanism — no Medicare negotiations, no Medicaid rebates. Consumers pay market prices. Three consecutive months of declining OTC prices points to genuine competitive relief rather than regulatory intervention.
Health insurance prices are falling rapidly. The index for insurance is down 6.4 percent compared with a year ago, which may reflect the decline in drug prices.
The drug price decreases are arriving against a complex broader backdrop. The headline Consumer Price Index rose 4.2 percent over the past year, its fastest pace since April 2023, driven largely by a 23.5 percent surge in energy prices. Gasoline prices are up sharply. Grocery prices, however, rose just 0.1 percent in May, and new car prices fell. Prices for smart phones have fallen 11.2 percent.
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