Pharmaceutical companies have raised the list prices of 775 brand-name drugs so far this year, with a median increase of 4.5 percent, exceeding the rate of inflation, according to an analysis conducted for the Wall Street Journal.
Drugmakers typically raise prices at the start of the year, and Ars reported on January 2 that companies had plans to raise the list prices of more than 500 prescription medications. The updated analysis, carried out by 46brooklyn Research, a nonprofit drug-pricing analytics group, gives a clearer picture of pharmaceutical companies’ activities this month.
High-profile drugs Ozempic (made by Novo Nordisk) and Mounjaro (Eli Lilly), both used for Type II diabetes and weight loss, were among those that saw price increases. Ozempic’s list price went up 3.5 percent to nearly $970 for a month’s supply, while Mounjaro went up 4.5 percent to almost $1,070 a month. The annual inflation rate in the US was 3.4 percent for 2023.
The asthma medication Xolair (Novartis) and the Shingles vaccine Shingrix (GlaxoSmithKline) saw price increases above 7.5 percent, the Wall Street Journal noted. The highest prices were around 10 percent. For some drugs, the single-digit percentage increases can equal hundreds or even thousands of dollars. For instance, the cystic fibrosis treatment Trikafta (Vertex Pharmaceuticals) went up 5.9 percent to $26,546 for a 28-day supply. And the psoriasis therapy Skyrizi (AbbVie) saw an increase of 5.8 percent, bringing the price to $21,017.
The list price is typically not the price that people and health insurance plans pay, and pharmaceutical companies say they sometimes don’t make more money from raising list prices. Instead, they argue that the higher list prices allow them to negotiate large discounts and rebates from pharmacy middle managers, whose revenue and dealings are opaque. Drugmakers who spoke with the Wall Street Journal attributed this year’s price hikes to market conditions, inflation, and the value the drugs provide. Overall, the tactics increase the cost of health care.
The hefty hikes come as the federal government is trying to crack down on the high prices of drugs in the US, which pays far more for prescription medications than other high-income countries. Last year, Medicare began, for the first time, negotiating the prices of 10 costly drugs. The negotiations were a provision of the 2022 Inflation Reduction Act. And a provision in 2021’s American Rescue Plan Act now forces drugmakers to pay Medicaid large rebates if their drug price increases outpace inflation.
But, it’s not enough to provide Americans with relief from high drug prices. On Thursday, Stat reported that Senate health committee chair Bernie Sanders (I-Vt) took steps to subpoena pharmaceutical CEOs regarding a Congressional investigation on high drug prices. Sanders invited Johnson & Johnson CEO Joaquin Duato, Merck CEO Robert Davis, and Bristol Myers Squibb CEO Chris Boerner to testify—but only Boerner agreed, and only on the condition that he would not be the only CEO testifying. The trio were invited to a hearing titled “Why Does the United States Pay, By Far, The Highest Prices In The World For Prescription Drugs?,” which was originally scheduled for January 25. Now, Sanders will hold a committee vote on January 31 on whether to issue subpoenas for the CEOs of Johnson & Johnson and Merck. If the committee votes in favor, it will be the first time it has issued a subpoena in more than 40 years.
All three companies have sued the federal government over the new regulations requiring them to negotiate prices with Medicare. J&J and Merck accused Sanders of calling them to testify as retribution for their legal action.
“You have opted not for the most effective way of securing information relevant to the Committee’s important work on drug prices, but for a broad-ranging public spectacle, with witnesses you can question on pending litigation you disagree with,” Merck wrote to Sanders.
Sanders called the two CEOs’ refusal to testify “absolutely unacceptable.”