Big Pharma rang in the New Year by having customers ring up higher drug prices at the checkout counter. According to Stat News, several big-name drug makers hiked prices up nearly 10%.
Allergan (AGN) upped the price of 18 medicines by 9.5 percent. This particular number was reached to keep the drug maker to its pledge of “no double-digit” price hikes. The pledge was made as part of social contract issued over growing anger at the price of medication. Allergan did release a statement noting the new prices stay within the range of their pledge. They are one of the few drug companies to actually make the pledge.
However, they are just one of the major drug makers to hike up drug prices just below the 10% mark. Take a look at this data gathered by Stat News:
Horizon Pharma (HZNP)
Teva Pharmaceuticals (TEVA)
Insys Therapeutics (INCY)
Collegium Pharmaceuticals (COLL)
Supernus Pharmaceuticals (SUPN)
Synergy Pharmaceuticals (SGYP)
ALL raised drug prices at least 8% to 9%. More companies are expected to release data in the coming weeks; the list is expected to grow.
The numbers may be below the 10% threshold but many are concerned it shows a lack of restraint on big pharma’s part to keep drug prices manageable for the average consumer. Consumer groups, lawmakers, and now a coalition of institutional investors are demanding several drug makers compile reports about the risks created by high prices.
The Real Cost
David Mitchell heads Patients for Affordable Drugs, a consumer group hoping to get answers.
He says there is no justification for the drug price hikes. He goes on to tell Stat News, “They do this because they can until someone stops them. Meanwhile, patients are going to be hurt by the price increases, because they will drive out-of-pocket costs and premiums. Medicare Part D beneficiaries, for instance, pay out of pocket based on list price, so there is a direct impact.”
As for the insurers, it’s unclear how much the raised prices will actually impact their customers. Ira Loss of Washington Analysis explains that list prices aren’t the prices insurers will pay. Between discounting and rebating the actual price could be much lower. But he notes, it’s hard to track that data because the discounts change from buyer to buyer. Loss also says that the price hikes do mean more money for the drug companies but probably not a full 9.5% increase in profits.
Drug Prices Can Go Higher
A Cowen analysts survey found purchasers expect even higher costs in the years to come. The survey highlighted that brand-name drug prices are expected to rise 3% to 4% annually over the next three years. That could be an 11% increase for some drugs by 2022.
An additional result of that survey, according to Stat News, found that the medicines mentioned as likely to have the greatest influence on overall drug price inflation were oncology, specialty drugs, orphan diseases, and gene therapies.
Jeffrey A. Newman represents whistleblowers: 1-800-682-7157