Pharmaceutical companies have increased the list prices of 775 branded drugs so far this year, with the median increase of 4.5% exceeding the rate of inflation. According to an analysis done for the Wall Street Journal.
Pharmaceutical companies typically raise prices at the beginning of the year, but Ars reported on January 2 that companies plan to raise list prices for more than 500 prescription drugs. A new analysis conducted by 46brooklyn Research, a nonprofit drug price analysis group, provides a clearer picture of drug company activity this month.
Ozempic (made by Novo Nordisk) and Munjaro (Eli Lilly), high-profile drugs used for type II diabetes and weight loss, are among the drugs that have seen price increases. Ozempic’s list price increased by 3.5 percent to about $970 per month, while Munharo’s list price increased by 4.5 percent to nearly $1,070 per month.The US annual inflation rate is 3.4% in 2023.
Prices for the asthma drug Xolair (Novartis) and the shingles vaccine Shingrix (GlaxoSmithKline) rose more than 7.5%, the Wall Street Journal noted. The highest price was about 10%. For some drugs, a single-digit percentage increase can equate to hundreds or even thousands of dollars. For example, cystic fibrosis drug Trikafta (Vertex Pharmaceuticals) rose 5.9% in 28 days to $26,546. Also, psoriasis drug Skyrizi (AbbVie) rose 5.8% to $21,017.
Reply from legislators
List prices are typically not the prices people or health insurance plans pay, and drug companies say it may not be profitable to raise list prices. Rather, they argue that high list prices allow them to negotiate deep discounts and rebates from middle-level pharmacy managers, whose profits and transactions are opaque. Pharmaceutical companies interviewed by the Wall Street Journal blamed this year’s price increases on market conditions, inflation and the value the drugs offer. Overall, this tactic increases health care costs.
The big price increases come as the federal government attempts to crack down on drug price gouging in the United States, where prescription drugs are far more expensive than in other high-income countries. Last year, Medicare began negotiating prices for 10 expensive drugs for the first time. The negotiations were a provision of the Inflation Control Act of 2022. And the provisions of the American Rescue Plan Act of 2021 require drug companies to pay large rebates to Medicaid if drug prices increase faster than inflation.
But that alone won’t be enough to relieve Americans from high drug prices. Statistic newspaper reported on Thursday that the chairman of the Senate Health Committee said: Bernie Sanders (I-Vermont) has taken steps to subpoena pharmaceutical company CEOs. Regarding the Congressional investigation into high drug prices. Sanders invited Johnson & Johnson CEO Joaquin Duato, Merck CEO Robert Davis, and Bristol-Myers Squibb CEO Chris Boerner to testify, but Boerner was the only one who agreed to testify. The condition was that he would not be the only CEO to testify. Mr. Sanders was invited to a hearing titled “Why Does the U.S. Pay By far the Highest Prices in the World for Prescription Drugs?” originally scheduled for January 25th, but now Mr. Sanders A committee vote is scheduled for the 31st. On whether he will issue subpoenas to the CEOs of Johnson & Johnson and Merck. If the commission votes yes, it would be the first time the commission has issued a subpoena in more than 40 years.
All three companies are suing the federal government over new regulations that require them to negotiate prices with Medicare. J&J and Merck accused Sanders of calling the testimony in retaliation for the lawsuit.
“Instead of choosing the most effective way to secure information relevant to the Commission’s important work on drug pricing, you have chosen a broader public platform where you can gather and question witnesses in pending litigation with which you disagree. I made the choice,” Merck said in a letter to Sanders.
Sanders criticized both CEOs’ refusal to testify, calling it “absolutely unacceptable.”
