{"id":21428,"date":"2016-07-17T13:30:09","date_gmt":"2016-07-17T18:30:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21428"},"modified":"2016-07-17T13:30:09","modified_gmt":"2016-07-17T18:30:09","slug":"this-is-whats-cannibalizing-the-us-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21428","title":{"rendered":"This is What\u2019s Cannibalizing the US Economy"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/07\/15\/big-pharma-sales-boom-on-drug-price-increases\/\">This is What\u2019s Cannibalizing the US Economy<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The sector is booming, but it\u2019s a costly boom.<\/strong><\/p>\n<p>In the\u00a0sluggish US economy, the goods-producing sector has been in decline since late 2014, but sales in its\u00a0biggest\u00a0sub-sector are booming: medicines.<\/p>\n<p>Drugs are a physically small part of the goods-producing economy. But in terms of dollars, they\u2019re the elephant in the room: According to the wholesales report by the\u00a0<a href=\"http:\/\/www.census.gov\/wholesale\/pdf\/mwts\/currentwhl.pdf\" target=\"_blank\">Commerce Department<\/a>, total drug sales by manufacturers to pharmacies, hospitals, and others in the distribution chain jumped 11.3% from a year ago (not seasonally adjusted) to $54.3 billion.<\/p>\n<p>That was the largest of the wholesale categories in the report: larger than \u201cGroceries\u201d ($51.5 billion), \u201cElectrical\u201d ($45.0 billion),\u201dPetroleum\u201d ($43.4 billion), and Automotive ($36 billion). Drug sales accounted for 12.2% of total wholesales. For the last 12 months, it was 12.0%.<\/p>\n<p>In May a year ago, manufacturers sold $48.8 billion in drugs, or 11.3% of total wholesales. In May 2014, drugs accounted for 9.4% of total wholesales. In May 2013, it was 9.1%. In May 2012, it was 8.8%.<\/p>\n<p>You get the idea. Drug sales at the wholesale level account for an ever larger portion of total wholesales.<\/p>\n<p>Total wholesales rose 0.3% in May year over year. Without the $5.5 billion increase in sales of drugs, total wholesales would have fallen 0.9% year-over-year.<\/p>\n<p>Are Americans really consuming that much more in pharmaceutical products? Hardly: According to the Producer Price Index, prices charged by manufacturers of pharmaceutical products jumped 9.8% in May from a year ago.<\/p>\n<p>So the\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/drugmakers-pricing-power-remains-strong-1468488601\">Wall Street Journal<\/a>\u00a0reviewed corporate filings and conference-call transcripts of the 20 largest members of Big Pharma in the US and found that over two-thirds had attributed their sales increases in the first quarter at least in part to jacking up prices. Among them:<\/p>\n<p>Pfizer disclosed that price increases (and in some cases, higher volume of prescriptions) pushed up revenues for nine drugs that together reached $2 billion in the US.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>This is What\u2019s Cannibalizing the US Economy The sector is booming, but it\u2019s a costly boom. In the\u00a0sluggish US economy, the goods-producing sector has been in decline since late 2014, but sales in its\u00a0biggest\u00a0sub-sector are booming: medicines. Drugs are a physically small part of the goods-producing economy. But in terms of dollars, they\u2019re the elephant [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13973,841,4254,14182],"class_list":["post-21428","post","type-post","status-publish","format-standard","hentry","category-economics","tag-us-commerce-department","tag-us-economy","tag-wolf-richter","tag-wolftstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21428"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21428\/revisions"}],"predecessor-version":[{"id":21429,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21428\/revisions\/21429"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}