Medical care prices remain relatively well-contained. While earlier in the century the price of medical care services often increased at more than a 5.0 percent annual rate, inflation in this component has not differed much from the overall CPI in recent years. The cost of medical care services fell by 0.1 percent in May and is up 2.3 percent over the last year.
Inflation in prescription drugs has been more erratic, but also has been reasonably well-contained lately; although a 1.4 percent jump in May brought the increase in this component to 3.7 percent over the last year. It is important to remember that this index measures price changes for drugs that are already on the market. It would not capture additional costs that might be associated with an expensive new drug being substituted for a cheaper older drug. For more, see the latest Prices Byte.