A pharmacist fills a prescription at Rock Canyon Pharmacy in Provo on May 9, 2019. Several drugmakers plan to raise the prices of more than 350 unique drugs in the United States in early January. (George Frey, Reuters)
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NEW YORK – Drugmakers including Pfizer, GlaxoSmithKline, Bristol Myers Squibb, AstraZeneca and Sanofi plan to raise the prices of more than 350 unique drugs in the United States in early January, according to data analyzed by health research firm 3 Axis Advisors.
The increases are expected as the pharmaceutical industry prepares for the Biden Administration’s Inflation Reduction Act, which would allow the government’s Medicare health program to directly negotiate the prices of some drugs starting in 2026. leading to higher production costs.
Increases are at list prices that do not include rebates and other discounts to pharmacy benefit managers.
In 2022, drug manufacturers raised the prices of more than 1,400 drugs, according to data published by 46brooklyn, a nonprofit affiliated with 3 Axis. These are the biggest increases since 2015.
According to 46brooklyn, the average drug price increased 4.9% last year, and the average increase was 6.4%. Both figures are lower than US inflation rates.
Drugmakers have mostly kept increases to 10% or less — an industry practice many big drugmakers have followed since they came under fire for multiple price hikes in the middle of the last decade.
Antonio Ciaccia, president of 3 Axis, said drugmakers are focusing on selling their drugs at higher prices as they focus on annual price increases. The IRA needs to develop this dynamic further, he said.
“Drug manufacturers need to take a more serious look at calibrating these launch prices … so they don’t get to the point where they can’t turn prices back into profitability in the future,” he said. he said.
More drug prices will be announced during January – historically the biggest price-raising month for drugmakers.
Pfizer announced the most increases to date, with price increases on 89 unique drug brands and an additional increase on 10 drug brands in its Hospira arm.
GSK followed suit, with planned increases in 26 unique drugs so far, including a nearly 7% increase in the popular shingles vaccine.
GSK was not immediately available for comment.
Notable increases expected include 9% price increases in Bristol Myers Squibb’s personalized CAR-T cell therapies Abecma and Breyanzi, both of which were already more than $400,000 for blood cancer treatments.
A company spokeswoman said there were several driving factors behind the list price increase for the two CAR-T cell treatments, including the rate of inflation, the cost of the treatments and the customized nature of the CAR-T manufacturing process.
Increases for Pfizer included a 6% increase in the price of Xeljanz, a treatment for autoimmune diseases including rheumatoid arthritis and ulcerative colitis, and a 7.9% increase in cancer drugs Ibrance and Xalkori.
A Pfizer spokeswoman said in an email that the company’s average list prices for drugs and vaccines in 2023 are well below overall inflation, about 3.6%, and that the increases are needed to support investments in drug discovery.
Pfizer noted that net prices — the prices the company actually charges for its drugs — have fallen over the past four years due to higher rebates and discounts paid to insurance companies and pharmacy benefit managers.
AstraZeneca is set to raise prices in the 3% range for blood cancer treatment Calquence, non-small cell lung cancer drug Tagrisso and asthma treatment Fasenra.
“AstraZeneca has always taken a thoughtful approach to pricing, and we continue to do so by considering many factors,” company spokesman Brendan McEvoy said.
In addition to significant R&D investments, McEvoy said AstraZeneca considers clinical value, patient population size, government/payer coverage requirements, patient access, competition and other market conditions.
Sanofi plans to raise the price of 14 drugs or vaccines.
A Sanofi spokesperson said the drugmaker’s price actions for 2023 are consistent with its responsible pricing approach, commitment to government policies and the need to respond to evolving market trends.