Pfizer (PFE-US), GlaxoSmithKline (GSK-US), Bristol Myers (BMY-US), Squibb, Axis Big US drugmakers including Stettenca (AZN-US) and Sanofi (SNY-US) plan to raise the prices of more than 350 unique drugs sold in the US starting in early January.
This is the pharmaceutical industry’s preparations in response to the Biden administration’s Inflation Reduction Act (IRA), which allows the government’s health care plan to directly negotiate the price of some drugs starting in 2026. At the same time, the pharmaceutical industry is also battling upward cost pressures from inflation and supply chain constraints.
This pullback is up the list price, without benefits or other discounts offered to pharmacies.
According to data released by “46brooklyn”, pharmaceutical companies will increase the prices of more than 1,400 drugs in 2022, setting a record since 2015. The median increase in drug prices over the past year was 4.9 percent, while the average was 6.4 percent, both figures below the U.S. inflation rate. 46brooklyn is the drug pricing nonprofit associated with 3 Axis.
Drugmakers have generally kept price increases at 10% or less, an industry practice followed by many large drugmakers as they have come under fire for too many price hikes in the middle of the past decade.
Antonio Ciaccia, president of 3 Axis, said that should be inflation, pharmaceutical companies have focused on launching drugs at higher prices, and the IRA should further promote this dynamic. “Pharmaceutical companies must take a closer look at listing prices, and must calibrate before listing, so as to avoid falling into a predicament where they will not be able to make profits in the future.”
More drug prices will be announced in January, which is usually the month when pharmaceutical manufacturers raise prices the most.
Pfizer has announced the most price increases so far, with 89 unique drug price increases, and Pfizer’s Hospira company also has 10 drug price increases.
It is followed by GlaxoSmithKline , which has so far planned to increase the price of 26 unique medicines, including a 7 percent hike on top-selling drug Shingrix, the shingles vaccine. The company had no immediate comment.
A Pfizer spokesman said the company’s average list price for its drugs and vaccines in 2023 is well below the headline inflation rate of about 3.6%, adding that the company must rely on price increases to support investment in developing drugs.
Brendan McEvoy, a spokesman for AstraZeneca, said that the company must consider many factors. In addition to major R & D, it must also consider clinical value, patient population size, government/payer coverage requirements, patient affordability, competition and other market conditions, ” This is a deliberate pricing, and we will continue to do so.”