Drugmakers are reportedly planning to increase the prices of more than 500 unique drugs in the United States from January. Pfizer, Sanofi, and Takeda Pharmaceutical are among the companies that intend to implement the hikes. The increases are expected in the face of the Biden Administration’s intention to publish significantly discounted prices for 10 high-cost drugs in September.
Higher inflation rates and manufacturing costs have also added pressure to the pharmaceutical industry. The government’s Medicare health program will be able to negotiate prices directly for some drugs starting in 2026 under President Joe Biden’s Inflation Reduction Act (IRA).
The prolonged Middle East conflict is posing a potential threat to supply chains and could cause disruptions, as shippers would be forced to halt or reroute traffic from the Red Sea, the world’s primary East-West trade route.
GlaxoSmithKline, along with two other firms, will reduce prices on at least 15 unique drugs in January, according to healthcare research firm 3 Axis Advisors. However, several companies have already reduced insulin prices earlier this year in an effort to avoid penalties under the American Rescue Plan Act.
Drug companies failing to comply with the law would have to provide rebates to the Medicaid program if prices of medicines exceed inflation. Starting from January 2024, rebates could even be larger than the actual net cost of the drug. “Every major former blockbuster insulin is going to get thrown under the tires of this policy,” stated 3 Axis Advisors president Antonio Ciaccia.
It is important to note that the price hikes mentioned in the results are on list prices, which exclude rebates to pharmacy benefit managers and other discounts. The drugmakers mentioned in the context did not give any comments immediately.