US Pharmaceutical Companies Raise Prices 6.6% in Early 2022

On average, pharmaceutical companies raised US list prices on cancer, diabetes, and other prescription drugs by 6.6% in the first few weeks of 2022. An analysis by Rx Savings Solutions showed that 150 companies raised prices on 866 drugs through Jan. 20.

In previous years, including 2015 and 2016, pharmaceutical companies have hiked prices more aggressively—at double-digit rates in some cases. Since then, bipartisan criticism and congressional hearings have placed downward pressure on drug price increases. During the early weeks of 2021, drug makers raised the prices of 893 drugs by an average of 4.5%.

Contributing to the political pressure is the Biden administration’s social spending bill. If passed, several drug pricing provisions would attempt to rein in pharmaceutical companies’ pricing power, capping price increases at the overall rate of inflation and requiring the government to negotiate prices for some medicines covered by Medicare.

“We know people are more stressed financially today than they were a year ago, and the need for information and support needs to grow,” said Michael Rea, CEO of Rx Savings Solutions.

However, because of rebates and discounts paid to insurance companies and pharmacy benefit managers, list price does not necessarily reflect the prices that purchasers will pay. A spokesperson from Pfizer claimed that “for the past three years, our net prices—the prices we actually receive for our medications—have fallen due to higher rebates and discounts.”

“After significant discounts and rebates paid to commercial and government payers, we expect the average net price increase to be significantly less across our portfolio,” a spokesperson from Novartis agreed.

Source: The Wall Street Journal, Jan. 30, 2022.