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Drugmakers Plan to Raise Prices in New Year: Reuters, 3 Axis Advisors

2021-01-04 06:00:08

Drug makers, including Pfizer Inc., Sanofi SA and GlaxoSmithKline Plc, plan to increase U.S. prices for more than 300 drugs in the United States on Jan. 1, according to drug manufacturers and data analyzed by 3 Axis Healthcare Advisors.

The rises come as drug manufacturers are reeling from the effects of the COVID-19 pandemic, which has reduced doctor visits and the demand for certain drugs. They are also fighting new drug price-cutting rules from the Trump administration that would reduce the industry's profitability.

The companies kept their price increases at 10% or less, and the largest pharmaceutical companies that have raised prices so far, Pfizer and Sanofi, kept almost all of their increases of 5% or less, 3 Axis said. 3 Axis is a consulting firm that works with pharmacy groups, health plans and foundations in drug pricing and supply chain issues.

GSK increased prices for two vaccines – Shingrix shingles vaccine and Pediarix diphtheria, tetanus and pertussis vaccine – by 7% and 8.6%, respectively, 3 Axis said.

Teva Pharmaceuticals Inc. increased the prices of 15 drugs, including Austedo, which treats rare neurological diseases, and asthma steroid Qvar, which together generated more than $ 650 million in sales in 2019 and saw price increases of between 5% and 6%. Teva raised prices for some drugs, including the muscle relaxant Amrix and narcolepsy treatment Nuvigil, by as much as 9.4%.

More price hikes are expected to be announced Friday and early January.

In 2020, drug manufacturers raised the prices of more than 860 drugs by an average of about 5 percent, according to 3 Axis. Drug price increases have slowed significantly since 2015, both in terms of the magnitude of the increases and the number of drugs affected.

The increases come as pharmaceutical companies like Pfizer play a hero in developing vaccines for COVID-19 in record time. The increases could help make up for lost earnings as doctor visits and new prescriptions plummeted during the global lockdown.

Pfizer plans to increase the prices of more than 60 drugs by 0.5% to 5%. Those include an increase of about 5% over some of the top sellers, such as the rheumatoid arthritis treatment Xeljanz and the cancer drugs Ibrance and Inlyta.

Pfizer said it had adjusted its drug list prices by about 1.3% for all products in its portfolio, in line with inflation.

"This modest increase is necessary to support investments that allow us to continue to discover new drugs and deliver those breakthroughs to the patients who need them," spokeswoman Amy Rose said in a statement, noting in particular COVID-19 vaccine that the company developed. with the German BioNTech SE.

It said net prices, which cover the pharmacy benefit administrator rebates and other rebates, have actually fallen over the past three years.

France's Sanofi plans to increase prices of some vaccines by 5 percent or less and will announce more price increases later in January, spokesman Ashleigh Koss said.

None of the company's price increases will exceed its projected 5.1 percent growth in U.S. health spending, she said.

Lowering prices for prescription drugs in the US – which are among the highest in the world – was a focus of US President Donald Trump, after making it a core promise of his 2016 campaign. He issued several executive orders to lower prices in late 2020, but its impact could be limited by legal challenges and other concerns.

A federal judge earlier this month blocked a last-minute Trump government rule aimed at lowering drug prices that would be introduced early this year. It was challenged by pharmaceutical industry groups including PhRMA, the country's largest pharmaceutical trade group.

President-elect Biden has also vowed to cut drug costs and allow Medicare, a health insurance program run by the US government, to negotiate drug prices. He is getting support from Congressional Democrats to pass such legislation, which the Congressional Budget Office has said could cost the industry more than $ 300 billion by 2029.

(Reporting by Michael Erman, editing by Nick Zieminski)

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