Drugmakers Celebrate the New Year by Raising Prices on Hundreds of Drugs an Average of 6.3%
Three dozen drugmakers are raising prices on more than 250 prescription drugs, according to an analysis by RX Savings Solutions. The average price increase will be around 6.3%, although some drugs will see prices increase by 10% or more.
By contrast, the inflation rate in the U.S. for the 12 months through November is 2.2%.
The analysis, first reported by Reuters and the Wall Street Journal, also showed that the number of drugs seeing price increases as well as the average rate of increase are lower than in 2017, as Big Pharma faces pressure from President Trump and consumer groups alike to keep drug prices lower.
Allergan Plc raised prices on more than 50 drugs, with most of them rising by 9.5%, Reuters said, noting that Allergan maintains that the average list price of all drugs in its portfolio are rising by 3.8%. AbbVie Inc, meanwhile, increased the price of Humira, an arthritis treatment that is the words’ top-selling drug, by 6.2%.
Some of the biggest price increases came from pain medications. Zingo, a pain treatment from 7T Pharma, rose by 133%, while pain medications from Hikma and Vertical Pharmaceuticals rose between 10% and 20%, the Journal said.
Drugmakers typically increase prices on many drugs in their portfolios at the beginning of the year, although a report from Bloomberg noted that some companies may be delaying the announcement of price increases to see what response they may receive from the White House as well as Congress, now that the Democrats are taking control of the House of Representatives.
“We think it is worth noting that 98 percent of the annual January list price increases were taken by this time last year,” Elliot Wilbur, an analyst at Raymond James, wrote in a research note. “Clearly, more caution is in the air and many major multinationals such as Pfizer and Novartis, which found themselves making the headlines several months back, have yet to implement their January increases.”
In July, Trump called out Pfizer and other drugmakers for price increases, saying they “should be ashamed that they have raised drug prices for no reason.” Pfizer responded back then by delaying a proposed increase on some of its drug prices, but in October the company reportedly indicated it would eventually raise prices between 3% and 9%.
“The reason it can keep happening is there is no market check, no person or entity to bring reason to determining drug prices,” Michael Rea, CEO of Rx Savings Solutions, told the Journal. Rx Savings makes software that helps employers and health plans compare prices on medications.