Pixelimage/iStock via Getty Images
Leading drugmakers are reportedly planning to raise prices on more than 500 drugs in January ahead of the US government’s planned price negotiations for ten top drugs under the Inflation Reduction Act.
The US government plans to publish discounted prices for the ten drugs in September. Under the Inflation Reduction Act, the government is now allowed to negotiate prices with drugmakers for drugs covered by the federal Medicare program.
Inflation and increased manufacturing costs also appear to be contributing to the expected price hikes, along with concerns about potential supply chain disruptions due to ongoing conflict in the Middle East, according to Reuters, which cited a report by healthcare research firm 3 Axis Advisors.
Meanwhile, three companies, including GSK (NYSE:GSK), have said they plan to lower prices on at least 15 unique drugs in January. Those cuts follow price reductions by drugmakers on certain insulin products earlier this year in order to avoid penalties that could be imposed under the American Rescue Plan Act of 2021, Reuters added.
According to Reuters, drugmakers have generally increased prices by around 5% annually since 2019.
For January 2024, Pfizer (NYSE:PFE) plans to increase prices on 124 unique drug brands, with its Hospira unit raising prices on another 22 brands. Takeda’s (NYSE:TAK) Baxalta unit is planning increases for 53 drugs, while UCB (OTCPK:UCBJF) (OTCPK:UCBJY) is looking at raise prices for 40 unique brands, Reuters said.
Sanofi (NASDAQ:SNY), which has said it plans to lower prices on many of its insulin products in 2024, is expected to increase prices on vaccines for typhoid, rabies and yellow fever by 9% in January, Reuters added.
Reuters noted that the costs of newly launched drugs rose from around $180K in the first six months of 2021 to over $220k in 2022. It added that a JAMA-published study found that prices for new drugs increased by around 20% annually from 2008 to 2021.