Increases in January 2023 are expected to come as American pharmaceutical firms prepare for Biden Administration's Inflation Reduction Act.

More drug prices are likely to be announced over the course of January — historically the biggest month for drugmakers to raise prices.
More drug prices are likely to be announced over the course of January — historically the biggest month for drugmakers to raise prices. (Reuters Archive)

Drugmakers including Pfizer Inc, GlaxoSmithKline PLC, Bristol Myers Squibb, AstraZeneca PLC and Sanofi SA plan to raise prices in the United States on more than 350 unique drugs in early January, according to data analysed by healthcare research firm 3 Axis Advisors.

The increases are expected to come as the pharmaceutical industry prepares for the Biden Administration's Inflation Reduction Act (IRA), which allows the government's Medicare health programme to negotiate prices directly for some drugs starting in 2026.

The industry is also contending with inflation and supply chain constraints that have led to higher manufacturing costs.

The increases are on list prices, which do not include rebates to pharmacy benefit managers and other discounts.

In 2022, drugmakers raised prices on more than 1,400 drugs according to data published by 46brooklyn, a drug pricing non-profit that is related to 3 Axis.

That is the most increase since 2015.

The median drug price increase was 4.9 percent last year, while the average increase was 6.4 percent, according to 46brooklyn.

Both figures are lower than the inflation rates in the United States.

Driving factors in price hikes

To date, Pfizer announced the most increases, with prices rising on 89 unique drug brands and an additional increase on 10 drug brands at its Hospira arm.

That was followed by GSK, with planned increases so far on 26 unique drugs, including nearly a 7 percent increase on its popular shingles vaccine Shingrix.

Notable increases expected include 9 percent price hikes on Bristol Myers Squibb's personalised CAR-T cell therapies Abecma and Breyanzi, both of which were already more than $400,000 for the blood cancer treatments.

A company spokesperson said there were several driving factors in increasing the list price of the two CAR-T cell therapies, including the rate of inflation, the value of the therapies, and the personalised nature of the CAR-T manufacturing process.

Increases for Pfizer include a 6 percent rise on the cost of Xeljanz, a treatment for autoimmune diseases including rheumatoid arthritis and ulcerative colitis, and 7.9 percent increases on cancer drugs Ibrance and Xalkori.

A Pfizer spokesperson said in an email that the company's average list prices for drugs and vaccines in 2023 are well below overall inflation at approximately 3.6 percent, noting that the increases are needed to support investments in drug discovery.

AstraZeneca is set to raise prices in the 3 percent range on blood cancer treatment Calquence, non-small cell lung cancer drug Tagrisso and asthma treatment Fasenra.

"AstraZeneca has always taken a thoughtful approach to pricing, and we continue to do so, considering many factors," said company spokesman Brendan McEvoy.

Sanofi plans to raise prices on 14 of its drugs or vaccines.

A Sanofi spokesperson said the drugmaker's 2023 pricing actions are consistent with its approach to responsible pricing, adherence to government policies, and the need to respond to evolving trends in the marketplace.

Source: Reuters