Double-digit list price increases for branded medicines in the middle of the last decade put drugmakers in political crosshairs. Under criticism and pressure, those boosts have slowed over time and by some measures, such as the U.S. Commerce Department’s consumer price index, have periodically dipped below zero.
The number of drugs subject to price increases may also be on the decline, Wilbur wrote in a note to clients. So far in 2022, there have been 1,614 increases, compared with 2,711 in 2021.
That hasn’t quieted calls for government to step in, however. Even though West Virginia Senator Joe Manchin has so far blocked legislation that would permit Medicare to negotiate the prices of some drugs, President Joe Biden and Democratic congressional leaders have said they’ll continue to work on a compromise that would be acceptable.
“It’s safe to say that all of us — all of us, whatever our background, our age, where we live — we can agree that prescription drugs are outrageously expensive in this country,” Biden said in a speech on Dec. 6.
Drugmakers, though, argue list price increases do not reflect what insurers pay because of the rebates that pharmacy benefit managers demand in order to keep drugs on their lists of covered medicines, called “formularies.” Pharmacy benefit managers can also place drugs on their formularies in “preferred” positions that lower patients’ out-of-pocket expenses.
Drug companies claim, too, that the gap between the list and “net,” or post-rebate, prices has grown over time. According to industry analyst Adam Fein, that difference exceeded $200 billion in revenue in 2021.
Data from the consultancy Iqvia, for example, show that while list prices rose by 4.4% on a group of branded medicines in 2020, net prices actually fell by 2.9%. From 2018 to 2020, net price increases on those drugs tracked below the consumer price index, according to the company. Iqvia hasn’t published figures for 2021 yet.
Among the major January price increases tracked by GoodRx were Esperion Therapeutics’ cholesterol-lowering pills Nexletol and Nexlizet at 9.9%; GlaxoSmithKline’s ovarian cancer drug Zejula at 7%; Pfizer’s breast cancer drug Ibrance at 6.9%; and Bayer’s liver cancer drug Nexavar at 6.9%. Pfizer also raised prices for three of its vaccines, Prevnar 20, Prevnar 13 and Trumenba, by roughly 6.5%, according to GoodRx.
In addition, specialty and generic drug companies raised their list prices on range of products. Endo Pharmaceuticals took 9.9% increases on four products, Teva 9.4% increases on 24 products, and Bausch Health 7.9% increases on 11 products.