Exclusive: Drugmakers To Raise Prices For 2021 As Pandemic And Political Pressure Put Their Revenue At Risk

NEW YORK (Reuters) – Drugmakers including Pfizer Inc, Sanofi SA and GlaxoSmithKline Plc plan to raise US prices of more than 300 drugs in the United States on Jan. 1, according to drugmakers and analyzed data by the health research firm 3 Axis Advisors.

The increases come as drugmakers reeling from the effects of the COVID-19 pandemic, which has reduced doctor visits and demand for some drugs. They are also fighting against the Trump administration’s new drug price reduction rules, which would reduce the profitability of the industry.

The companies have kept their price increases at 10% or less, and the biggest drug companies to raise prices so far, Pfizer and Sanofi, have kept almost all of their increases at 5% or less, 3 Axis said. 3 Axis is a consultancy firm that works with groups of pharmacists, health plans and foundations on drug pricing and supply chain issues.

GSK has increased the prices of two vaccines – the Shingrix shingles vaccine and the diphtheria, tetanus and pertussis vaccine Pediarix – by 7% and 8.6%, respectively, according to 3 Axis.

Teva Pharmaceuticals Inc has increased the prices of 15 drugs, including Austedo, which treats rare neurological disorders, and the asthma steroid Qvar, which together generated more than $ 650 million in sales in 2019 and saw price increases between 5% and 6%. Teva has increased the prices of some drugs, including the muscle relaxant Amrix and the treatment for narcolepsy Nuvigil, by up to 9.4%.

Further price increases are expected to be announced on Friday and early January.

In 2020, drugmakers increased the prices of more than 860 drugs by about 5% on average, according to 3 Axis. Drug price increases have slowed considerably since 2015, both in terms of the size of the increases and the number of drugs affected.

The increases come as pharmaceutical companies like Pfizer play the role of heroes in developing COVID-19 vaccines in record time. The hikes could help offset the loss in income as doctor visits and new prescriptions plummeted during the global lockdown.

Pfizer plans to increase the prices of more than 60 drugs by 0.5% to 5%. These include increases of around 5% on some of its top sellers like the rheumatoid arthritis treatment Xeljanz and the cancer drugs Ibrance and Inlyta.

Pfizer said it has adjusted the list prices of its drugs by around 1.3% for all products in its portfolio, based on inflation.

“This modest increase is necessary to support the investments that allow us to continue to discover new drugs and bring these advances to patients who need them,” spokeswoman Amy Rose said in a statement, highlighting in particular the COVID-19 vaccine developed by the company with the German company BioNTech SE.

He said his net prices, which cancel out discounts given to drugstore benefit managers and other discounts, have actually gone down over the past 3 years.

French company Sanofi plans to increase the prices of a number of vaccines by 5% or less and will announce further price increases later in January, spokesman Ashleigh Koss said.

None of the company’s price increases will be greater than the expected U.S. healthcare spending growth rate of 5.1%, she said.

Reducing prescription drug prices in the United States – which are among the highest in the world – was one of the priorities of US President Donald Trump, after making it a core commitment of his 2016 campaign. He published several decrees at the end of 2020 aimed at reducing prices, but their impact could be limited by legal challenges and other issues.

A federal judge earlier this month blocked a last-minute Trump administration rule to cut drug prices that was due to be implemented earlier this year. It has been challenged by groups in the pharmaceutical industry, including PhRMA, the country’s leading pharmaceutical trading group.

President-elect Biden also pledged to cut drug costs and allow Medicare, a U.S. government health insurance program, to negotiate drug prices. He has the backing of Congressional Democrats to pass such legislation, which the Congressional Budget Office says could cost the industry more than $ 300 billion by 2029.