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Tags: big pharma | prescription drug | biden | inflation

Big Pharma Set to Raise US Prices on 500 Drugs

Big Pharma Set to Raise US Prices on 500 Drugs
(Dreamstime)

Friday, 29 December 2023 09:44 AM EST

Drugmakers including Pfizer, Sanofi and Takeda Pharmaceutical plan to raise prices in the United States on more than 500 unique drugs in early January, according to data analyzed by healthcare research firm 3 Axis Advisors.

INFLATION

The expected price hikes come as the pharmaceutical industry gears up for the Biden Administration to publish significantly discounted prices for 10 high-cost drugs in September, and continues to contend with higher inflation and manufacturing costs

Under President Joe Biden's Inflation Reduction Act (IRA), the government's Medicare health program can negotiate prices directly for some drugs starting in 2026.

Worries are also growing about fresh disruption to supply chains from a prolonged Middle East conflict, with shippers forced to halt or reroute traffic from the Red Sea, the world's main East-West trade route.

Three companies including GlaxoSmithKline, which last week said it would cut prices on some asthma, herpes and anti-epileptic drugs for 2024, are also expected to lower prices on at least 15 unique drugs in January, according to the data.

The cuts come after several companies have already announced price decreases for insulins earlier this year, in an effort to avoid penalties that could have been imposed under 2021's American Rescue Plan Act if they had kept prices high.

Under the law, drug companies are required to rebate the Medicaid program if price increases on medicines outpace inflation — and beginning in January 2024 those rebates could even be larger than the actual net cost of the drug.

"Every major former blockbuster insulin is going to get thrown under the tires of this policy," 3 Axis president Antonio Ciaccia said.

The changes are on list prices, which do not include rebates to pharmacy benefit managers and other discounts.

The drugmakers did not immediately respond to requests for comment.

10% OR BELOW

Drugmakers have largely kept increases at 10% or below — an industry practice followed by many big players since they came under fire for too many price hikes in the middle of the last decade.

Even high rates of inflation have not inspired drugmakers to speed up their price increases on already-launched products.

Ciaccia said he had assumed last year that because of inflation, paired with concerns about the U.S. drug price negotiation plan in the IRA, "you would see the proverbial pedal to the metal. But basically the last five years have been the same."

Median price increases have hovered at around 5% since 2019, according to data from 46brooklyn, a drug pricing non-profit that is related to 3 Axis.

For at least the second year in a row, Pfizer has announced the most January price increases, accounting for more than a quarter of all the drugs with hikes planned. The New York-based drugmaker will increase prices on 124 unique drug brands, and put an additional increase on 22 drug brands at its Hospira arm.

Takeda-owned Baxalta announced the second-highest number of price increases, with 53 hikes planned so far, followed by Belgian drugmaker UCB Pharma, which intends to raise prices on 40 unique drugs.

NOTABLE 9% HIKES

Sanofi, which pledged to cut 2024 prices on most of its prescribed insulin products earlier this year, notably will raise prices on its typhoid fever, rabies and yellow fever vaccines each by 9% in January.

More drug prices are likely to be announced over the course of January - historically the biggest month for drugmakers to raise prices.

In 2023, drugmakers raised prices on 1,425 drugs, down from 2022, when they raised prices on 1,460 drugs, according to data published by 46brooklyn.

While drugmakers have pared back their price increases for established drugs, prices for newly launched drugs have hit record levels.

In 2022, the price of newly launched drugs topped $220,000 from around $180,000 in the first six months of 2021 suggesting a more than 20% increase. That's in line with a JAMA-published study on drug prices which showed that between 2008 and 2021 U.S. drug launch prices grew 20% annually.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
Drugmakers including Pfizer, Sanofi and Takeda Pharmaceutical plan to raise prices in the United States on more than 500 unique drugs in early January, according to data analyzed by healthcare research firm 3 Axis Advisors.
big pharma, prescription drug, biden, inflation
693
2023-44-29
Friday, 29 December 2023 09:44 AM
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