January 03, 2019
Drug Companies Kick off the New Year with Price Hikes
Drugmakers started off 2019 with price increases in the United States on more than 250 prescription drugs, including the world’s top-selling medicine, Humira. According to a Goldman Sachs analysis, prices were raised on about 27% of the top 500 branded drugs.
The average list price increase was 4 percent, half what it was in 2018. However, many analysts who follow the industry anticipate that pharmaceutical companies will wait to raise drug prices until after the first week of January to avoid the spotlight.
Allergan was particularly aggressive. It raised list prices on more than 50 drugs, and more than half of those by 9.5 percent. Because the United States leaves drug pricing to market competition, Americans pay higher prices than in other countries where governments directly or indirectly control the costs. As a result, the United States is the world’s most lucrative market for manufacturers, to the detriment of consumers.
The U.S. Department of Health and Human Services (HHS) has proposed policy changes aimed at lowering drug prices and passing more of the discounts negotiated by health insurers on to patients. However, those measures are not expected to provide substantial relief to consumers in the short-term and fail to provide government health agencies with the authority to negotiate or regulate drug prices.
“We will not see drugs truly become more affordable in this country until we allow Medicare to use its power to negotiate prices with drug corporations,” said Richard Fiesta, Executive Director of the Alliance. “Taking lesser, inadequate measures but not doing so is like putting a band-aid on a major wound.”