Pfizer, Merck & Co., Valeant All Increase Prices of Existing Drugs
October 5, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – While the nation focused on Martin Shkreli’s Turing Pharmaceuticals’ 5,000 percent price increase for its toxoplasmosis, other pharmaceutical companies, notably Pfizer Inc. which raised the price of 133 medications, have also increased prices on drugs, Bloomberg Business reported this morning.
Pfizer’s drugs saw an increase of approximately 10 percent, Bloomberg said. Lyrica, Pfizer’s blockbuster chronic pain medication, saw two 9.4 percent increases. Lyrica is expected to generate $4.8 billion in sales in 2015, making it the second biggest global drug on the market, Bloomberg said. Lyrica’s price increases along have contributed $208 million in additional quarterly sales, Bloomberg said.
According to Bloomberg, Pfizer has steadily increased the price point of its older medications since 2012, adding an additional $1.07 billion in revenue each quarter, which helped shore up declining revenues as the company’s drugs face increasing completion from generics.
Although Pfizer does offer discounts for its medications, a Morgan Stanley research analyst said Pfizer’s net prices grew 11 percent a year on average from 2012 to 2014, Bloomberg reported.
Pfizer is certainly not the only pharmaceutical company to raise prices on its products. Merck & Co. increased the price of 38 of its drugs, some by more than 10 percent.
California-based Gilead Sciences, Inc. has borne the brunt of wrath due to the $1,000 per-pill cost of Sovaldi, a treatment for Hepatitis C. Its high cost caused Medicaid, Medicare and the U.S. Department of Veterans Affairs to ration the availability of the drug. However, Sovaldi has been shown to be very effective, and has allowed patients and insurers to avoid costs associated with liver transplants, Business Insider reported.
Drugmakers argue that the price increases are not directly felt by the majority of consumers due to the price negotiations of insurance companies.
Some drug prices have dramatically jumped, such as Daraprim, which Turing acquired in August. Turing has since announced it will reduce the price of the drug, but has not said by how much. Also in August, Rodelis Therapeutics acquired tuberculosis drug Cycloserine and increased the price of a 30-day supply from $500 to $10,800. The company has since agreed to return the drug to its former owner after the outcry. However, Purdue Research Foundation, which sold the drug to Rodelis, doubled the price of Cycloserine after that company returned the drug.
Valeant Pharmaceuticals International, Inc. also raised the prices of medications it acquired in M&A activity. One drug, Cuprimine, used to treat the genetic Wilson’s Disease, saw a price increase of four-times its retail price after Valeant acquired the drug. Cuprimine had been on the market for 55 years, the New York Times said. According to a Deutsche Bank report, Valeant increased prices on its brand-name drugs an average of 66 percent, about five times more than its other competitors.
Following Turing’s price increase, former U.S. Secretary of State Hillary Clinton, a candidate for the Democratic presidential nomination, called for price caps on medications. Others have also picked up the cry, calling for a national board to set prescription drug prices. Bloomberg columnist Megan McArdle argues in a column in the Memphis Commercial Appeal that before any such drastic measures are taken, people must look at how such caps could limit future research given the high costs of bringing drugs through regulatory approval. She said those calling for price caps would need to prove their point prior to setting such limits.
“The onus is on them to show that the government would do a better job of determining the tradeoff between innovation and current prices than the market does — that it would not, for example, set prices artificially low to reap temporary political benefit, at the expense of future generations who would then go without beneficial treatments,” McArdle said.