Big pharma companies have plans to raise the price of more than 500 drugs in the U.S. early in the New Year.
3 Axis Advisors, a research firm in the health-care industry, analyzed data from drug companies such as Takeda Pharmaceutical, Sanofi and Pfizer to reveal that drug prices will go up early in January.
This move comes just as the Biden administration is planning to release new discounted prices for as many as 10 high-cost drugs come September 2024. The pharma industry as a whole is also dealing with significant challenges such as increased manufacturing costs coupled with high inflation.
The Inflation Reduction Act, pushed through Congress by Democrats using budget reconciliation in August 2022, allows Medicare to directly negotiate prices for certain drugs beginning in 2026.
That has caused many pharmaceutical companies to start putting plans in place now to offset what is expected to be a significant drop in revenue as a result of the act.
Yet, the planned increase in drug prices can’t be solely blamed on preparations for the Inflation Reduction Act. Thanks to Houthi rebels — who are backed by Iran — attacking ships in the Red Sea, many shippers have had to reroute their traffic, causing major delivery delays and increased costs for basic supplies.
That has caused even more disruptions to global supply chains at a time when disruption was already a concern.
Not all pharma companies are raising prices on drugs come 2024, though. GlaxoSmithKline, for example, announced just last week that prices for some anti-epileptic, herpes and asthma drugs would actually go down in the New Year, according to data reviewed by 3 Axis Advisors.
The company also plans to reduce the cost of 15 additional unique drugs come January.
Earlier in 2023, several other big pharma companies announced they would be decreasing the price of their insulin drugs as a way to avoid being penalized under the American Rescue Plan, which was passed in 2021.
Democrats' Inflation Reduction Act capped insulin costs at $35/month for seniors. This was a huge step forward in the fight to lower prescription drug prices—and I'll keep working to cap the cost of insulin at $35/month for everyone.
— Senator Patty Murray (@PattyMurray) December 24, 2023
Pfizer is the biggest source of the increased drug prices for 2024, with higher prices planned for 124 of its unique drug brands. Another 22 drug brands will experience price increases under the company’s Hospira arm.
