Sanofi – Drugmakers set to raise prices in US as lockdown hits revenues, Business News & Top Stories
NEW YORK • Drug firms including Pfizer, Sanofi and GlaxoSmithKline were planning to raise prices on more than 300 drugs in the United States on Jan 1, according to drugmakers and data analysed by healthcare research firm 3 Axis Advisors.
The hikes come as drugmakers reel from the effects of the Covid-19 pandemic, which has reduced doctor visits and demand for some drugs.
They are also fighting new drug price cutting rules from the Trump administration, which would reduce the industry’s profitability.
The companies had kept their price hikes at 10 per cent or below, and the largest drug companies to raise prices so far, Pfizer and Sanofi, kept nearly all of their increases at 5 per cent or less, said 3 Axis, a consulting firm that works with pharmacist groups, health plans and foundations on drug pricing and supply chain issues.
GSK did raise prices on two vaccines – Shingrix for shingles and Pediarix for diphtheria, tetanus and pertussis – by 7 per cent and 8.6 per cent, respectively.
Teva Pharmaceuticals raised prices on 15 drugs, including Austedo, which treats rare neurological disorders, and asthma steroid Qvar, which together grossed more than US$650 million (S$859 million) in sales in 2019 and saw price hikes of between 5 per cent and 6 per cent.
Teva hiked prices for some drugs, including muscle relaxant Amrix and narcolepsy drug Nuvigil, by as much as 9.4 per cent.
More price hikes were expected to be announced yesterday.
Drugmakers last year raised prices on more than 860 drugs by around 5 per cent on average, according to 3 Axis. Drug price increases have slowed substantially since 2015, both in terms of the size of the hikes and the number of drugs affected.
The increases come as pharmaceutical companies like Pfizer are playing hero by developing vaccines for Covid-19 in record time. The hikes could help make up for lost revenue as visits to doctors and new prescriptions plummeted during the global lockdown.
Pfizer plans to raise prices on more than 60 drugs by between 0.5 per cent and 5 per cent. Those include 5 per cent hikes on some of its top sellers like rheumatoid arthritis treatment Xeljanz and cancer drugs Ibrance and Inlyta.
>860 Number of drugs in US whose prices were raised by around 5 per cent last year, according to 3 Axis Advisors.
>300 Number of drugs in US whose prices are expected to rise this year.
10% Maximum rise in drug prices so far.
Pfizer said it had adjusted the list prices of its drugs by around 1.3 per cent across 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 medicines and deliver those breakthroughs to the patients who need them,” spokesman Amy Rose said, pointing in particular to the Covid-19 vaccine the firm developed with Germany’s BioNTech.
It said that its net prices, which back out rebates to pharmacy benefit managers and other discounts, have fallen for the past three years.
Meanwhile, France’s Sanofi plans to increase prices on a number of vaccines by 5 per cent or less and will announce more price increases later this month, said spokesman Ashleigh Koss.
None of the company’s price increases will be above the expected growth rate of US health spending of 5.1 per cent, she added.
Slashing US prescription drug prices – among the world’s highest – was a focus of President Donald Trump, who made it part of the core pledge of his 2016 campaign.
He issued several executive orders late last year meant to cut prices, but their impact could be limited by legal challenges and other problems. A federal judge last month blocked a last-minute Trump administration rule aimed at lowering drug prices that was set to be implemented at the beginning of this year. It was challenged by drug industry groups including PhRMA, the nation’s leading pharmaceutical trade group.