In a recent development, drugmakers such as Pfizer, Sanofi, as well as Takeda Pharmaceutical went on to plan to raise costs in the US when it comes to more than 500 drugs in early January 2024, according to data analysed by healthcare research firm 3 Axis Advisors and as reported by Reuters.
Not including various doses and formulations, over 140 brands of drugs will have their prices increased in January 2024, according to what the data showed.
It is well to be noted that the anticipated price surge comes as the pharmaceutical sector gets all geared up for the Biden Administration to publish majorly discounted prices for 10 high-cost drugs in September last year and goes on to contend with higher inflation as well as manufacturing costs.
Interestingly, under President Joe Biden’s Inflation Reduction Act- IRA, the government’s Medicare health program can go on to negotiate prices directly when it comes to certain drugs starting in 2026.
It is worth noting that worries are also kind of increasing on the fresh disruption when it comes to supply chains from a prolonged Middle East conflict challenge because of which the shippers are either forced to halt or reroute traffic from the Red Sea, which by the way happens to be the world’s main East-West trade route.
Three companies, including the likes of GlaxoSmithKline, which in December last year said that it would slash prices on certain asthma, herpes, as well as anti-epileptic drugs for 2024, are also anticipated to lower the prices on a minimum of 15 drugs in January, as per the data.
As per the information on Reuters, these cuts come after many companies have already gone on to announce their price decreases when it comes to insulin earlier in 2023, in an endeavor so as to avoid penalties that could get imposed under 2021’s American Rescue Plan Act if they had gone on and kept the prices high.
As per the law, drug companies are needed to rebate the Medicaid program if price rises on medicines outpace inflation, and beginning January 2024, those rebates could very well be larger than the actual net cost when it comes to that drug.
As per Antonio Ciaccia, 3 Axis president, every major former blockbuster insulin is all set to get thrown under the tires when it comes to this policy.
Robyn Karnauskas, who happens to be a Truist analyst, said in a note that Eli Lilly went on to plan to lower the prices of its Humalog as well as Humulin insulins by 75.8% and 70%, respectively, on December 30 last year and to surge the price of its diabetes drug Mounjaro by 4.5% on Jan. 1. Apparently, these changes were not included in the data from 3 Axis.
The changes happen to be on list prices, which do not have rebates to pharmacy benefit managers along with other discounts.
10% or below
It is well to be noted that the drugmakers have mostly kept prices at 10% or below, which is an industry practice that happens to be followed by many big players as they came under fire for numerous price hikes spread across the middle of the last decade.
Even high rates when it comes to inflation have not inspired drugmakers to quicken their price increases on the products that are launched already.
As per Ciaccia, he had assumed in 2022 that due to inflation, teamed with concerns about the U.S. drug price negotiation plan within the IRA, one would see the proverbial pedal to the metal. However, the past five years have been all the same.
Notably, the median price rises have hovered at somewhere around 5% since 2019, as per the data from 46brooklyn, which happens to be a drug pricing non-profit that is related to 3 Axis.
It is well to be noted that for at least the second year in a row, Pfizer has gone on to announce the most January price rises, thereby accounting for more than a quarter of the drugs put together, with hikes planned. The New York-based drugmaker will go on to increase prices on 124 drugs and also put an additional rise on 22 drugs as far as its Hospira arm is concerned. Besides different doses and formulations, 30 and 6 branded drugs will go on to have their prices increased by Pfizer and Hospira, respectively.
Baxalta, which happens to be Takeda-owned, went on to announce the second-highest number of price rises, with 53 hikes planned so far, which was followed by UCB Pharma, a Belgian drugmaker, which looks to increase the prices of 40 unique drugs.
After different doses as well as formulations are discounted, 8 branded drugs from Baxalta and 6 branded UCB medicines will go on to have their prices increased this January.
Interestingly, Sanofi, which decided to cut 2024 prices when it comes to most of its prescribed insulin products earlier in 2023, notably will go on to raise prices as far as its typhoid fever, rabies, as well as yellow fever vaccines are concerned, each by 9% this month.
It is well to be noted that more drug prices are likely to be announced over the course of January, which, by the way, historically is going to be the biggest month when it comes to drugmakers, so as to raise prices.
Apparently, in 2023, drugmakers went on to raise prices on 1,425 drugs, down from 2022, wherein they had raised prices on 1,460 drugs, as per the data published by 46brooklyn.
Although the drugmakers have gone on to pare back their price rises for established drugs, prices when it comes to newly launched drugs have gone on to hit record levels.
In 2022, the cost of newly launched drugs topped $220,000 as compared to $180,000, which was witnessed in the first six months of 2021, thereby suggesting a more than 20% increase. This happens to be in line with a JAMA-published study when it comes to drug prices, which laid down that between 2008 and 2021, U.S. drug launch prices grew by 20% per year.