Pharmaceutical Companies Started 2020 by Raising the Price of Hundreds of Drugs
Pfizer Inc. started 2020 by increasing prices by over 9% on more than 40 products. (The drug industry usually sets prices at the start of the year and again in the middle of the year.)
More than 60 drugmakers raised prices in the U.S. on Wednesday, according to an analysis from Rx Savings Solutions. The average increase was 5.8% including increases on different doses for the same drug.
The average is just below that of a year ago, when more than 50 companies raised the prices on hundreds of drugs by an average of more than 6%.
Pfizer said that 27% of the drugs Pfizer sells in the U.S. will increase in price by an average of 5.6%. More than 90 products rose in price. Among them are Ibrance and rheumatoid arthritis therapy Xeljanz. Pfizer’s largest percent increases, 15%, are on its heparin products, which are generic blood thinners typically administered in hospitals.
Drugmakers release reports claiming that their net prices have declined because of large rebates to PBMs, which negotiate prices in secret.
Pfizer said the net effect on revenue growth in 2020 will be 0%, which is the same percentage expected for 2019. The company said the average net price of its drugs declined by 1% in 2018.
“Prices go up but demand remains the same,” said Michael Rea, CEO of Rx Savings Solutions. “Without the appropriate checks and balances in place, this is a runaway train. Consumers, employers and health plans ultimately pay the very steep price.”
A Glaxo spokeswoman confirmed the increases and said net prices for its U.S. products fell about 3.4% on average annually the past five years.
A Sanofi spokeswoman confirmed the increases and said that the changes are consistent with its pledge to ensure price increases don’t exceed medical inflation.
A Biogen spokesman confirmed the price changes and said adjustments are made to products for which it continues to invest in research, and otherwise increases follow inflation.
In addition to Pfizer’s increases on heparin, companies increased prices for several drugs by more than 10%, according to the analysis.