Drug manufacturers increase prices by 3.3% in the new year

Pfizer Inc.,

PFE 0.19%

which has a large portfolio of products, took the lead with the most increases, which caused prices to rise by more than 200 products by 5%. The pharmaceutical industry usually determines prices at the beginning of the year and again in the middle of the year.

In total, about 70 drugmakers in the U.S. rose in price on Friday, according to an analysis by Rx Savings Solutions, which sells software to help employers and health plans choose the cheapest drugs. According to the analysis, the average increase of 3.3% included changes in different doses for the same drug. Inflation has registered 1.2% over the past 12 months.

This year’s average is lower than a year ago, when more than 60 companies increased the prices of hundreds of medicines by 5.8%, according to the analysis. However, it found that companies increased prices by at least 50% more products compared to last year.

The biggest price increase, 31%, comes via Advanz Pharma Corp.

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and the hypertension product Dutoprol according to the analysis. The drug is a combination of two cheaper generic drugs that have been around for decades. The British company did not immediately respond to requests for comment.

Pfizer is developing a Covid-19 vaccine that he developed with German BioNTech SE in the US and other countries. A year ago, Pfizer similarly raised prices on a number of drugs, and was previously criticized by President Trump for the price his products priced.

Many of the products based in New York increased by 5% or less, according to the Rx Savings Solutions analysis. Among them is breast cancer treatment Ibrance, which sold about $ 4 billion worldwide during the first nine months of last year, plus rheumatoid arthritis therapy Xeljanz and pneumococcal vaccine Prevnar.

A Pfizer spokesman said the company’s price increases are in line with inflation and are needed to fund research on new medicines. Pfizer said most of them have affected hospital and sterile injectable products, about a third of which are sold at cost of production.

It is said to be dedicated to growth through extensive use of medicines, not price increases. The company noted that net prices have been low or falling over the past three years.

The price increases for companies affect so-called list prices set by manufacturers; most patients do not pay these prices, which do not take into account discounts, rebates and insurance payments. Patients without insurance, or those with a deductible pharmacy, can pay the full list price.

Medicine manufacturers said prices are rising in combination with discounts they give to pharmacy benefit managers, or PBMs, to get favorable placement on the lists of covered medicines, known as formulations.

In fact, net prices have fallen due to huge rebates to PBMs, who secretly negotiate prices with their clients, such as employers and unions.

According to the pharmaceutical analysts of SSR Health LLC, net prices fell by 2.3% during the third quarter of 2020 compared to a decrease of 4.7% in 2019. While list prices have risen on average almost every quarter since 2017, net prices decreased over time, according to data from SSR.

In recent years, pharmaceutical companies have increasingly cited the net price phenomenon, saying that they do not actually benefit much from price increases and that their net prices suffer because they pay larger discounts to pharmacy benefit managers.

The drug industry has been increasingly looking at the prices of its products through patients, legislators and health plans over the past few years. Some businesses have responded with promises not to raise price prices above certain levels, including to less than the cost of inflation; but they are also trying new and creative ways to get paid for their most expensive medicine.

The Trump administration’s efforts to lower drug prices have been largely thwarted by industry lawsuits, including an attempt to link the prices of certain prescription drugs in the US to their prices in other developed countries. In November, however, the government finalized a rule that sought to limit the rebate to middlemen in Medicare.

The election of President Joe Biden’s administration is also expected to try to reduce the cost of prescription drugs, and Mr. Biden called for the reduction of the prices of new medicines. Most of his proposals come from the Democratic Gamebook for Limiting Drug Prices, including one that would set up an independent government council to set prices paid by most government procurement programs, including Medicare.

“Millions of consumers in this country urgently need information to make more informed decisions about what their therapy and pharmacy options are, and to avoid pitfalls,” said Michael Rea, CEO of Rx Savings Solutions. Clients of the Overland Park, Kan., Company include Target Corp and Toyota Motor Corp.

Most product prices from his company’s analysis rose by less than 10%.

Teva Pharmaceutical Industries Ltd.

TEVA 0.52%

According to the analysis, a large generic drug company has increased the prices of about a dozen products, including some painkillers. According to the analysis, it also increased the price of his migraine drug Ajovy by 5%.

A Teva spokesman said the Israeli company set prices to give patients access to its products while committing themselves to researching products and to shareholders.

Glaxo, which is based in the UK, increased the vaccine Shingrix and meningitis vaccine Bexsero by 7% each, according to the analysis.

A Glaxo spokesman confirmed the increases, saying the overall increase in the company’s product portfolio was 2.6%. She also said that the company made less price increases than last year and did not increase the price on 18 products.

According to the analysis, the French Sanofi increased the price of more than a dozen products by 5% or less. A company spokesman said the increases were less than the country’s overall growth rate for healthcare, and that the company was pricing its products responsibly.

Bausch Health BHC 3.69%

Cos., Which announced plans to shut down its eye care business during the summer, according to the analysis, increased the prices of about 40 products. Affected drugs include stomach medicine Xifaxan and antidepressant Wellbutrin, both of which have risen in price by 8%.

The company did not immediately respond to a request for comment.

Write to Jared S. Hopkins by [email protected]