Top U.S. drug manufacturers including Pfizer, Takeda Pharmaceutical, and Sanofi are planning to raise prices on more than 500 drugs in January, according to healthcare research firm 3 Axis Advisors.
Exclusive: Drugmakers set to raise US prices on at least 500 drugs in January @mikeerman1 @PatrickWingrove https://t.co/S8E5SN1B4x
— 3 Axis Advisors (@3AxisAdvisors) December 29, 2023
The data provided to Reuters shows that excluding different doses and formulations, more than 140 unique drugs will see a price increase.
Exclusive: Drugmakers set to raise U.S. prices on at least 500 drugs in January https://t.co/9FObZZ58hQ pic.twitter.com/CIi6TIH0SR
— Reuters (@Reuters) December 29, 2023
For the second year in a row, Pfizer will have the most price increases, accounting for a quarter of all drugs with increases planned. Baxalta, owned by Takeda, announced the second-highest number of price increases. UCB Pharma, a Belgian drugmaker, came in third.
In July, drug manufacturers increased list prices above the annual inflation rate of 3% for 112 drugs, according to a data analysis by the Center for American Progress.
The Biden Administration’s Inflation Reduction Act of 2022 requires drug companies to limit their Medicare price increases to the inflation rate, or pay rebates. However, it does not extend to the commercial market, which covered 55% of Americans in 2022.
The Biden Administration is currently in negotiations with 10 drug companies who are producing some of the most expensive prescription drugs. In September 2024, the Biden Administration is expected to publish significantly discounted prices for these drugs.
Starting in 2026, the Inflation Reduction Act will allow for Medicare to directly negotiate drug prices.
Concerns are also growing about supply-chain disruptions due to the Israel-Hamas conflict, with shipping companies halting or rerouting shipments from the Red Sea, the main East-West trade route of the world.
Most pharmaceutical companies have kept price increases under 10% or below, in contrast to the large increases seen in the past. The median price increase has stayed around 5% since 2019.
However, a JAMA study found that prices for new drugs have increased sharply, exceeding $220,000 in 2022 from $180,000 in 2021, a more than 20% increase. Dr. Aaron Kesselheim, who co-authored the study, says, “I don’t see anything changing that trend.” He believes that the high prices will have to be addressed by Congress.
