It’s a new year, and many top pharma companies are taking the opportunity to raise prices for their big sellers. As the industry has in the past, several drugmakers opted to raise prices to ring in 2019, with Allergan leading the pack.
Allergan jacked up the stickers on seven drugs by 9.5% to start 2019, according to a note from Evercore ISI analyst Umer Raffat. Also hiking certain prices was Biogen, which raised them on three drugs between 2% and 6%, and Bristol-Myers Squibb, which raised 5 drug prices between 1.5% and 6%. Additionally, Eli Lilly raised prices for Jardiance and Tradjenta by 6%, according to the analyst.
Other companies in Raffat’s coverage such as Celgene, Amgen, Gilead, Mylan, Bausch and Pfizer didn’t raise prices on Tuesday, according to the note. But Pfizer has already disclosed dozens of price hikes coming in mid-January after previously deferring them.
Merck, for its part, didn’t raise prices on Jan. 1 after a handful of price hikes in November and December last year, according to Raffat. Teva raised prices on five products by more than 8%, according to a note from Jefferies analyst David Steinberg.
The increases come after several drugmakers last summer pledged not to raise their prices for the rest of 2018 amid a firestorm over Pfizer’s planned increases. As the Trump administration worked to implement its pricing blueprint, Pfizer disclosed price increases that angered the president. He tweeted that the company “should be ashamed,” and Pfizer ultimately held off.
Now, though, it seems companies are ready to raise prices once again. Last month, Reuters reported that 28 drugmakers filed paperwork with California warning of 2019 price hikes. Among them were Novartis, Bayer, Amgen, AstraZeneca, GlaxoSmithKline and others, according to the news service. Under a new law in the state, drug companies must give a 60-day notice of hikes if a drug’s list price grows by 16% over a two-year period.
Michael Rea, CEO of Rx Savings Solutions, said his company has tracked about 285 price hikes from about 60 companies so far this year. He said the number is lower than previous years but noted that certain large companies such as Pfizer haven’t yet raised prices.
Weighing in on the moves, Bernstein analyst Ronny Gal wrote that it was “a bit unsophisticated” for Allergan to raise prices and attract attention like it did. The company’s CEO Brent Saunders in 2016 inked his famous piece on pharma’s “social contract” and pledged to limit price increases to once per year and under 10%. His company’s Tuesday price increases fell within that commitment, but still generated some criticism.
Gal also pointed out that Biogen’s spinal muscular atrophy drug Spinraza, Johnson & Johnson and AbbVie’s cancer drug Imbruvica and Roche and AbbVie’s Venclexta to treat chronic lymphocytic leukemia didn’t get price hikes. He said that it appears there’s still “more caution” for pricing in expensive specialty and oncology drug classes and wondered whether hikes will come later.
Many drugmakers are raising U.S. prices even as healthcare officials work to lower them. HHS is pushing to force certain Medicare prices closer to international levels and obligate drugmakers to include drug prices in TV ads, plus more.
At the FDA, regulators are approving more generics than ever and working to promote biosimilars, among other tactics underway to boost competition. Meanwhile, Democrats took control of the House of Representatives in November and have started touting new proposals to control pharmaceutical costs.