Drugmakers raise prices 3.3% in new year



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The pharmaceutical industry is raising prices for many products in the new year, albeit at a slightly slower pace than the past two years.

GlaxoSmithKline GSK -0.65%

PLC and Sanofi SA are among the companies that have increased the prices of hundreds of drugs by an average of 3.3%, according to a new analysis.

Pfizer Inc.,

PFE 0.19%

which has a large product portfolio, led the way with the most increases, increasing prices by 5% or less on more than 200 products. The pharmaceutical industry normally sets prices for its therapies at the start of the year and again in the middle of the year.

In total, about 70 drugmakers hiked their prices in the United States on Friday, according to an analysis by Rx Savings Solutions, which sells software to help employers and health plans choose the cheapest drugs. The average 3.3% increase included changes in different doses for the same drug, according to the analysis. Inflation has reached 1.2% for the past 12 months.

This year’s average is lower than a year ago, when more than 60 companies raised the prices of hundreds of drugs by an average of 5.8%, according to the analysis. However, he found that companies had raised prices at least 50% more for products compared to last year.

The largest price increase, 31%, came via Advanz Pharma Corp.

CXRXF -11.80%

and its hypertension product Dutoprol, according to the analysis. The drug is a branded combination of two cheaper generic drugs that have been around for decades. The UK-based company did not immediately respond to requests for comment.

Pfizer is deploying a Covid-19 vaccine that it developed with German company BioNTech SE in the United States and other countries. A year ago, Pfizer also raised the prices of a number of drugs and has already been criticized by President Trump for the way he priced his products.

Many of the New York-based company’s products grew 5% or less, according to analysis from Rx Savings Solutions. Among them are the Ibrance breast cancer treatment, which sold around $ 4 billion worldwide in the first nine months of last year, as well as the treatment for rheumatoid arthritis Xeljanz and the pneumococcal vaccine. Prevnar.

A spokeswoman for Pfizer said the company’s price increases were in line with inflation and were needed to fund research for new drugs. Most of them were for hospital and sterile injectable products, about a third of which are sold at or below their cost of manufacture, Pfizer said.

He said he was dedicated to growth through increased use of drugs, not price increases. The company noted that its net prices were either stable or had fallen over the past three years.

Price increases for businesses affect so-called list prices set by manufacturers; most patients do not pay these prices, which do not take into account discounts, rebates and insurance payments. Patients without insurance or those with a drug deductible can pay the full list price.

The price of drugs is complicated and secret. WSJ discusses how the flow of money, drugs and discounts behind the scenes can drive up the price of prescription drugs for consumers. Illustration: Mallory Brangan

Drugmakers said prices were increased alongside discounts they gave to pharmacy managers, or PBMs, to get favorable placement on covered drug lists known as formulas.

In fact, net prices have fallen due to the steep discounts given to PBMs, which negotiate prices in secret with their clients, such as employers and unions.

In the third quarter of 2020, net prices fell 2.3% from 4.7% in 2019, according to pharmaceutical analysts at SSR Health LLC. While list prices have risen on average almost every quarter since 2017, net prices have declined during that time, according to data from SSR.

In recent years, pharmaceutical companies have increasingly cited the phenomenon of net prices, claiming that they do not really benefit from list price increases and that their net prices suffer because they pay larger discounts to managers of pharmacies.

The pharmaceutical industry in recent years has faced increasing scrutiny from patients, lawmakers and health plans over the prices of its products. Some companies have responded by pledging not to increase list prices beyond certain levels, including below the cost of inflation; but they’re also trying new and creative ways to get paid for their more expensive drugs.

The Trump administration’s efforts to reduce drug prices have been largely thwarted by industry lawsuits, including an attempt to tie the prices of some prescription drugs in the United States to their prices in others. developed nations. Yet in November, the administration finalized a rule to reduce discounts paid to Medicare intermediaries.

President-elect Joe Biden’s administration is also expected to try to cut prescription drug costs, and Biden has called for limits on the prices of newly launched drugs. Most of his proposals are inspired by the Democratic handbook for reducing drug prices, including one that would set up an independent government council to determine the prices paid by most government purchasing programs, including Medicare.

Pfizer’s Covid-19 vaccine developed with BioNTech in Germany.


Photo:

Scotty Perry / Bloomberg News

“Millions of consumers in this country are in desperate need of information to make more informed decisions about their treatment and drug options, and to avoid pitfalls,” said Michael Rea, managing director of Rx Savings Solutions. Customers of Overland Park, Kan., Include Target Corp. and Toyota Motor Corp.

Most of his company’s analysis product prices rose by less than 10%.

Pharmaceutical industries Teva Ltd.

SUITS YOU 0.52%

, a major generic drug company, has raised the prices of a dozen products, including some pain relievers, according to the analysis. It also increased the price of its migraine medication Ajovy by 5%, according to the analysis.

A spokeswoman for Teva said the Israel-based company sets prices to allow patients access to its products while maintaining its product research and shareholder commitments.

According to the analysis, UK-based Glaxo increased the prices of Shingrix shingles vaccine and Bexsero meningitis vaccine by 7% each.

A Glaxo spokeswoman confirmed the increases and said the average increase in the company’s product portfolio was 2.6%. She also said the company raised less prices than last year and did not increase the price of 18 products.

French company Sanofi has raised the price of more than a dozen products by 5% or less, according to the analysis. A spokesperson for the company said the increases were lower than the country’s overall health spending growth rate and the company was pricing its products responsibly.

Bausch Health BHC 3.69%

Cos., Which over the summer announced plans to part with its eye care business, has raised prices by around 40 products, according to the analysis. Drugs that have been affected include the stomach drug Xifaxan and the antidepressant Wellbutrin, both of which are up 8% in price.

The company did not immediately respond to a request for comment.

Write to Jared S. Hopkins at [email protected]

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