Pharma companies to hike the cost of over 350 drugs in 2023: Analysis
The costs of over 350 different drugs are set to rise in the United States this year as multiple pharmaceutical companiesIncludes Pfizer, prepare for President Joe Biden’s Inflation Reduction Act (IRA) to take effect and inflation Continues to soar.
Pfizer, AstraZeneca, GlaxoSmithKline, Bristol Myers Squibb, and Sanofi are among several drugmakers set to raise prices on more than 350 products from January, according to an analysis conducted by health care research firm 3 Axis Advisors.
Along with the IRA, the price hikes are also in response to the soaring cost of living and continued supply chain constraints that have led to higher manufacturing costs.
Under the IRA, the government’s Medicare program will be able to directly negotiate the prices of some drugs that don’t have competition starting in 2026. These increases will be applied to list prices and do not include rebates for pharmacy benefit managers or other discounts.
The Medicare health insurance program covers individuals who are 65 or older and those with certain disabilities.
Specifically, the provision allows the government to negotiate a “fair price” Medicare Part D will cover 10 drugs by 2023. The prices for those drugs will be implemented three-years later. The negotiated price list expands to 15 drugs in 2027 and 2028 and 20 in 2029.
Drugs For price negotiation in 2026, the following will be offered: announced by Sept. 1, 2023, and manufacturers that don’t follow the negotiation requirements will be subject to tax and penalties.
Drugmakers Increased the Cost of More than 1,000 Drugs by 2022
Although drugmakers tend to avoid implementing major price hikes, a drug pricing non-profit that is related to 3 Axis called 46brooklyn Research found that manufacturers raised the prices of 1,400 different drugs in 2022, marking the most increases since 2015.
46brooklyn reported that the median price rise for drugs was 4.9 percent, and the average was 6.4 percent. These increases are however lower than current inflation rates in America.
However, Antonio Ciaccia, president of 3 Axis, said that the IRA would implement a dynamic in which drugmakers launch products at higher costs so that further price hikes aren’t required.
An example is Biogen’s highly controversial Alzheimer’s drug Aduhelm, which initially came with a price tag of $56,000 per year. That was later halved following public backlash scrutiny over the drug’s efficacy.
A report released on Dec. 29 by the House Oversight and Energy and Commerce committees found that the U.S. Food and Drug Administration’s approval process for the drug was “rife with irregularities” and “highly atypical.”
“Drugmakers have to take a harder look at calibrating those launch prices out of the gate … so they don’t box themselves in to the point where in the future, they can’t price increase their way back into profitability,” Ciaccia said.
To date, Pfizer has announced the most increases across 89 unique drug brands, including a 6 percent rise in the cost of Xeljanz, a treatment for autoimmune diseases including rheumatoid arthritis and ulcerative colitis, and 7.9 percent increases for cancer drugs Ibrance and Xalkori.
New York-based company Hospira also saw an increase of 10 drug brands.
Price hikes can be attributed to inflation
London-headquartered GSK, formerly GlaxoSmithKline, has announced the second highest amount of increases, with planned hikes so far in 26 unique drugs, including nearly a 7 percent increase on its FDA-approved vaccine for the prevention of shingles, Shingrix.
COVID-19 vaccine maker AstraZeneca is also set to raise prices around 3 percent for its blood cancer treatment Calquence, non-small cell lung cancer drug Tagrisso, and asthma treatment Fasenra, while Bristol Myers Squibb is set to hike its CAR-T cell therapies Abecma and Breyanzi by 9 percent. Both of those blood cancer treatments were already more than $400,000 a year.
Sanofi, a French multinational pharmaceutical company and health care provider, plans to increase the prices of 14 of its vaccines or drugs.
A Pfizer spokesperson attributed the price hikes to much-needed support investments in drug discovery and noted that net prices—those the company actually receives for its drugs—have fallen in the past four years owing to what Pfizer says are higher rebates and discounts paid to insurance companies and pharmacy benefit managers.
Brendan McEvoy, spokesperson for AstraZeneca, stated that the company has “always taken a thoughtful approach to pricing, and we continue to do so, considering many factors.”
A spokesperson for Bristol Myers Squibb credited the price hikes to increased inflation, the value of the therapies, and the “personalized nature” Behind the manufacture of CAR-T cells therapies.
A spokesperson from Sanofi stated that the price rises in 2023 were expected to be “consistent with its approach to responsible pricing, adherence to government policies, and the need to respond to evolving trends in the marketplace.”
This report was compiled by Reuters
Katabella is a journalist for The Epoch Times. She focuses on news from the United States, around the world and in business.
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