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Exclusive-Drugmakers set to raise U.S. prices on at least 500 drugs in January By Reuters

Exclusive-Drugmakers set to raise U.S. prices on at least 500 drugs in January By Reuters


© Reuters. FILE PHOTO: A person holds pharmaceutical tablets and capsules in this photo taken in Ljubljana September 18, 2013. REUTERS/Srdjan Zivulovic/File Photo

By Michael Erman and Patrick Wingrove

NEW YORK (Reuters) – Drugmakers including Pfizer (NYSE:), Sanofi (NASDAQ:) and Takeda Pharmaceutical plan to raise prices on more than 500 drugs in the United States in early January, according to data analyzed by healthcare research firm 3 Axis Advisors.

Apart from different doses and formulations, more than 140 drug brands will see their prices increase next month, according to the data.

The expected price hikes come as the pharmaceutical industry prepares for the Biden administration to release significantly reduced prices for 10 high-cost drugs in September, and continues to face higher inflation and manufacturing costs.

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

Concerns are also growing over further disruptions to supply chains from protracted conflict in the Middle East, with shippers forced to interrupt or reroute traffic from the Red Sea, the world’s main East-West trade route.

Three companies, including GlaxoSmithKline (NYSE:), which announced last week that it would reduce prices of certain asthma, herpes and anti-epileptic drugs by 2024, are also expected to lower prices by at least 15 drugs in January, according to the data.

These reductions come after several companies already announced insulin price cuts earlier this year, in an effort to avoid penalties that could have been imposed under the American Rescue Plan Act of 2021 if they had maintained the high prices.

Under the law, drug companies are required to cut Medicaid if drug price increases exceed inflation — and starting in January 2024, those rebates could even be higher than the drug’s actual net cost.

“All the old insulin blockbusters are going to be thrown under the tires of this policy,” declared the president of the 3 Axes, Antonio Ciaccia.

The changes concern list prices, which do not include pharmacy benefit manager discounts and other reductions.

The drugmakers did not immediately respond to requests for comment.

10% OR BELOW

Drugmakers have largely kept increases to 10% or less — 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 inflation rates have not incentivized drugmakers to accelerate price increases for their already-launched products.

Ciaccia said he assumed last year that because of inflation, coupled with concerns about the U.S. plan to negotiate drug prices 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 around 5% since 2019, according to data from 46brooklyn, a drug pricing nonprofit linked to 3 Axis.

For at least the second year in a row, Pfizer announced the largest price increases in January, accounting for more than a quarter of all drugs for which increases are planned. The New York-based pharmaceutical manufacturer will raise prices on 124 drugs and impose an additional increase on 22 drugs in its Hospira business.

Excluding different doses and formulations, 30 and six branded drugs will see their prices increased by Pfizer and Hospira respectively.

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

After the delivery of different doses and formulations, eight Baxalta brand drugs and six UCB brand drugs will see their prices increase next month.

Sanofi, which pledged earlier this year to reduce the prices of most of its prescribed insulins in 2024, will notably increase the prices of its typhoid, rabies and yellow fever vaccines by 9% each in January.

Drug price increases are expected to be announced during the month of January, historically the most favorable month for price increases by drugmakers.

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 scaled back their price increases for established drugs, prices for newly launched drugs have reached record highs.

In 2022, the price of newly launched drugs exceeded $220,000, up from around $180,000 in the first six months of 2021, suggesting an increase of more than 20%. This is consistent with a study published by JAMA on drug prices, which shows that between 2008 and 2021, introductory drug prices in the United States increased by 20% per year.



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