According to the latest data provided to in-PharmaTechnologist by the healthcare research firm 3 Axis Advisors, after the news was broken by Reuters, a total of 116 pharmaceutical companies have raised the prices of 497 of their products, at an average of 5.17%.
Drugmakers in this list include Novartis, Merck, Allergan, Pfizer, BMS, GSK, Sanofi and AbbVie, among others, with “still a number of manufacturers yet to report their price changes,” according to a spokesperson for 3 Axis Advisors.
The spokesperson told us that drugmakers have moderated their approach to price increases over the last few years; however, 2020 brought ‘slightly more increases’ than prior years but with a lower percentage increase compared to previous years.
Research by 3 Axis Advisors has shown that “launch prices are what have been growing while the de-emphasizing of increases on pre-existing drugs has occurred,” the spokesperson noted.
He added that “more and more of these price increases are being used to increase drugmaker rebates and discounts back to insurers, pharmacy benefit managers, and government payers as a means to entice formulary placement and favorable drug coverage.”
Therefore, the gap between the list prices and the actual net prices (post-discounts) of the drug products has been growing significantly in recent years, resulting in ‘sticker prices’ increases that do not necessarily lead to increased profits for drugmakers, the spokesperson said.
“Sounds crazy, but it’s the reality of our backwards system,” the analyses firm representative commented, and added:
“Unfortunately, it’s the uninsured, patients with high-deductibles, and small employers who end up shouldering the cost of these artificially inflated prices.”
Reuters previously reported that, among the largest companies, Novartis raised the price of nearly 30 drug products marketed in the US, with the increases being within the range of 5.5% to 7%.
Merck’s increases affected about 15 drugs, including blockbuster immunotherapy Keytruda (pembrolizumab), which was raised by 1.5%, according to Reuters, with the company stating that the increases follow its commitment to not raise US net prices by more than inflation annually.