Grafico Azioni Glaxosmithkline (LSE:GSK)
2 Mesi : Da Dic 2019 a Feb 2020
By Jared S. Hopkins
Pharmaceutical companies started 2020 by raising the prices of hundreds of drugs, according to a new analysis, though the average increase of 5.8% was lower than a year earlier amid growing scrutiny from patients, lawmakers and health plans.
Pfizer Inc. led the way, including increasing prices by over 9% on more than 40 products. The drug industry traditionally sets prices for its therapies 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, which sells software to help employers and health plans choose the least-expensive medicines. The average increase was 5.8%, according to the analysis, 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%, according to the analysis.
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 of the New York-based company's products rose in price, according to the Rx Savings Solutions analysis. Among them are Ibrance, which sold nearly $3.7 billion globally through the first nine months last year, and rheumatoid arthritis therapy Xeljanz.
A Pfizer spokeswoman said that nearly half of its drugs whose prices went up are sterile injectables, which are typically administered in hospitals, and the majority of those increases amount to less than $1 per product dose.
Pfizer's largest percent increases, 15%, are on its heparin products, which are generic blood thinners typically administered in hospitals.
Pfizer said the heparin increases are to help offset a 50% increase in the cost of raw materials and expand capacity to meet market demand. The company said it is monitoring the global heparin supply, which has been challenged by the impact of African swine flu in China, as the drug is derived from pig products and disruption could lead to a shortage. Pfizer said that its U.S. heparin supply is not sourced from China.
Overall, the increases by drugmakers Wednesday affect "list prices," which are set by manufacturers, although most patients don't pay these prices, which don't take into account rebates, discounts and insurance payments. Drugmakers have said prices are increased in conjunction with rebates they give to pharmacy-benefit managers, or PBMs, in order to be placed on the lists of covered drugs known as formularies.
In fact, drugmakers have said that their net prices have declined because of large rebates to PBMs, which negotiate prices in secret with their clients, such as employers and labor unions.
Pfizer said its price increases will be offset by higher rebates paid to insurers and middlemen. The company 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.
In 2018, Pfizer was assailed by President Trump after the company raised the prices on some 40 drugs. Pfizer temporarily rolled back the increases, but raised prices again later.
Patients for Affordable Drugs, an organization that advocates for policies that lower drug prices, criticized this week's increases.
"These companies have no self control, and patients will continue to suffer as a result, until Congress acts," said Juliana Keeping, a spokeswoman for the group, which has received funding from entities linked to billionaire John Arnold, a critic of pharmaceutical industry pricing strategies.
Republicans and Democrats in Congress have drawn up proposals for lowering drug costs, while the Trump administration recently introduced a plan for importing drugs from Canada.
"Prices go up but demand remains the same," said Michael Rea, CEO of Rx Savings Solutions. Clients of the Overland Park, Kan., company include Target Corp. and Quest Diagnostics Inc. "Without the appropriate checks and balances in place, this is a runaway train. Consumers, employers and health plans ultimately pay the very steep price."
While some increases in his firm's analysis were steep, most product prices rose by less than 9%.
AbbVie Inc. raised the price of rheumatoid arthritis treatment Humira, the world's top-selling drug, by 7.4%, according to the analysis. Through the first nine months of 2019, Humira sales totaled nearly $11 billion.
AbbVie didn't respond to a request for comment.
GlaxoSmithKline PLC raised the prices on more than two dozen different therapies, although none by more than by 5%. That includes its shingles vaccine, Shingrix, which sold about $1.7 billion globally in the first nine months of 2019.
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.
Other major companies that raised prices included generic drugmaker Teva Pharmaceutical Industries Ltd., which raised the price of more than two dozen products, but none by more than 6.4%, according to the analysis. Sanofi S.A. raised prices on some of their therapies, but none by more than 5%, while Biogen Inc. took increases that didn't exceed 6%, including on multiple-sclerosis therapy Tecfidera.
A Teva spokeswoman said the company sets prices to help enable patient access, maintain a commitment to innovation and fulfill obligations to its stakeholders. 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 therapies by more than 10%, according to the analysis.
Cotempla XR-ODT, which is approved in the U.S. to treat attention-deficit hyperactivity disorder in children between 6 and 17 years old, increased by more than 13% to $420 for a month supply. The therapy is sold by Neos Therapeutics Inc., based in Grand Prairie, Texas.
Representatives for Neos didn't respond to requests for comment.
Write to Jared S. Hopkins at firstname.lastname@example.org
(END) Dow Jones Newswires
January 02, 2020 16:11 ET (21:11 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.