As Americans rang in the New Year Wednesday with champagne (or some other variety of effervescent wine) and fireworks, several drugmakers did so in a way far more likely to reverberate nationally than “Auld Lang Syne”: raising drug prices.
Citing drug companies and data analysis by the research firm 3 Axis Advisors, Reuters reported Tuesday and Wednesday that drugmakers like Pfizer, GlaxoSmithKline, Sanofi, Bristol-Myers Squibb and Gilead Sciences would increase U.S. list prices on more than 250 drugs this year.
The median price increase will be 5%, and nearly all the increases will be less than 10%, the news service reported. For example, Bristol-Myers Squibb increased the prices of the cancer drugs Opdivo (nivolumab) and Yervoy (ipilimumab) by 1.5%, while the blood-thinning drug Eliquis (apixaban) saw a 6% increase. Revlimid (lenalidomide), used to treat blood cancers and acquired through BMS’ $74 billion purchase of Celgene last year, also saw a 6% increase.
The price increase for Eliquis came as the Food and Drug Administration announced Dec. 23 that it had approved the first generic versions of the drug, giving the go-ahead to applications from generic drugmakers Mylan and Micro Labs.
List price – also known as wholesale acquisition cost – means the full price of a drug, which can range from tens of thousands to millions of dollars, as opposed to the out-of-pocket costs paid by patients. Payers in the U.S. contract with pharmacy benefit managers to negotiate discounts and rebates, meaning they ultimately pay less than the actual list price, though the amount they pay is kept confidential.
In a note to investors Thursday, Cowen analyst Phil Nadeau wrote that while Biogen’s increases on list prices for its multiple sclerosis drugs were consistent with its history of raising prices in the first quarter of each fiscal year, those increases have decelerated. Year-over-year increases on prices for Tecfidera (dimethyl fumarate), Avonex (interferon beta-1a) and Plegridy (peginterferon beta-1a) went from 10% in 2017 to 6% for Tecfidera in 2019 and 2020 and 2% – a figure consistent with the inflation rate – for Avonex and Plegridy.
Because Biogen and also Gilead Sciences’ price increases were below 10%, they are unlikely to draw significant scrutiny, Nadeau wrote.
Nevertheless, the various companies’ list price increases come at a politically sensitive time, as high drug prices will be a hot topic in this year’s presidential election. And while list prices and out-of-pocket costs are not the same thing, the latter have become intolerably high for many patients, particularly those with high-deductible health plans and a growing number of Medicare beneficiaries.
A study of 2,980 Type 2 diabetes patients conducted by researchers at DD and published in November in the Journal of the American Medical Association found that a higher proportion of patients with high-deductible plans did not refill their prescriptions for branded medications.
And according to a report in June by the Kaiser Family Foundation, more than 1 million Medicare Part D enrollees had annual out-of-pocket spending greater than $3,200 in 2017, exceeding the out-of-pocket threshold and more than six times the average for enrollees not receiving low-income subsidies. The number of patients facing such high costs was more than twice the figure in 2007.
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