By Michael Erman and Julie Steenhuysen
NEW YORK (Reuters) – Drugmakers including Pfizer Inc, GlaxoSmithKline PLC, Bristol Myers Squibb, AstraZeneca PLC and Sanofi SA plan to raise prices in the United States for more than 350 unique drugs in early January, according to data analyzed by health care research agency 3 Axis consultants.
The increases are expected to come as the pharmaceutical industry prepares for the Biden administration’s Inflation Reduction Act (IRA), which will allow the government’s Medicare health program to directly negotiate prices for some drugs starting in 2026. The industry also struggles with inflation and supply chain constraints that have led to higher production costs.
The increases are on list prices, excluding pharmacy benefit manager discounts and other discounts.
In 2022, drugmakers increased the prices of more than 1,400 drugs according to data published by 46brooklyn, a nonprofit drug pricing organization related to 3 Axis. That is the largest increase since 2015.
The median increase in drug prices last year was 4.9%, while the average increase was 6.4%, according to 46brooklyn. Both numbers are lower than inflation rates in the United States.
Drugmakers have largely kept increases at 10% or less — a practice followed by many major drugmakers since they came under fire for too much price increases in the middle of the last decade.
Antonio Ciaccia, president of 3 Axis, said drugmakers have focused on launching their drugs at higher prices because of the attention paid to annual price increases. The IRA should promote this dynamic, he said.
“Drug manufacturers need to look harder at calibrating those launch prices out of the gate … so they don’t put themselves to the point where they can’t raise the price in the future to get back to profitability,” he said.
More drug prices are likely to be announced throughout January — historically the biggest month for drugmakers to raise prices.
To date, Pfizer announced the most increases, with prices rising for 89 unique drug brands and an additional increase for 10 drug brands at its Hospira business.
That was followed by GSK, with planned increases of 26 unique drugs to date, including a nearly 7% increase over its popular shingles vaccine Shingrix.
GSK was not immediately available for comment.
Notable increases expected include 9% price increases on 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 spokesperson said there were several driving factors in increasing the list price of the two CAR-T cell therapies, including the rate of inflation, the value of the therapies and the personalized nature of the CAR-T manufacturing process.
Increases for Pfizer include a 6% increase in the cost of Xeljanz, a treatment for autoimmune diseases including rheumatoid arthritis and ulcerative colitis, and 7.9% increases in the cancer drugs Ibrance and Xalkori.
A Pfizer spokesperson said in an email that the company’s average list prices for drugs and vaccines in 2023 will be well below headline inflation of about 3.6%, noting that the increases are needed to drive investment in discovering support medicines.
Pfizer noted that net prices — the prices the company actually receives for its drugs — have fallen over the past four years due to higher discounts and rebates paid to insurance companies and pharmacy managers.
AstraZeneca plans to increase prices by 3% for the blood cancer treatment Calquence, the non-small cell lung cancer drug Tagrisso and the asthma treatment Fasenra.
“AstraZeneca has always taken a thoughtful approach to pricing, and we continue to do so, taking into account many factors,” said company spokesperson Brendan McEvoy.
In addition to significant R&D investments, McEvoy said AstraZeneca considers clinical value, patient population size, government/payer coverage requirements, patient affordability, competition and other market conditions.
Sanofi plans to raise the prices of 14 of its drugs or vaccines.
A spokesman for Sanofi said the drugmaker’s pricing actions for 2023 are consistent with its approach to responsible pricing, compliance with government policies and the need to respond to changing market trends.
(Report by Michael Erman and Julie Steenhuysen; edited by Diane Craft)
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