What was the impact of the increase in the psychotherapeutics index on aggregate producer price indexes?
The recent run up in the psychotherapeutics index had a considerable impact on aggregate producer price indexes. Prices for prescription drugs exclusive of psychotherapeutics rose 6.1 percent in the 12 months ended in July 1998; the overall prescription drugs index rose 22.3 percent over that period. Similarly, the PPI for finished goods exclusive of psychotherapeutics decreased 0.6 percent in the year ended in July 1998 while the PPI for Finished goods decreased 0.3 percent over that 12-month period. (3) Could the recent large increases in the psychotherapeutics index possibly be accurate? The January-July increases in this index accurately reflected the actual price data reported by the firms sampled by the PPI for psychotherapeutics. As described in (4) below, however, estimates of price change as measured by the PPI are based on scientifically selected samples of products and producers and thus are subject to the variability inherent in the sampling process. Because the recent larg
