When 2019 Rolls Around, Drug Companies Are Planning Price Hikes on Many Medicines
In November, pharma giant Pfizer announced plans to raise the price of 41 drugs in January. It will not be the only company to do so, despite rhetoric from the White House condemning price increases on prescription medicines.
This morning, Reuters reported that multiple companies have expressed plans to increase the price of prescription drugs in the new year. Companies like Novartis and Bayer are among more than 30 different pharmaceutical companies that have plans to raise the price of medications sold in the United States in 2019. This ends the temporary halt that many companies announced in the middle of 2018 after President Donald Trump publicly criticized Pfizer for its proposed 10 percent price increase for 40 of its most popularly prescribed drugs. Less than two weeks after Pfizer announced the 10 percent price hike, the company reversed course after Trump and Pfizer head Ian Read had a meeting. Following that meeting, Read announced plans to defer the price increases to 2019 in order to give Trump time to work on a blueprint aimed at lowering drug costs through several proposed initiatives.
Citing documents it reviewed that were filed with the state of California, Reuters said companies like GlaxoSmithKline, Amgen, AstraZeneca, Allergan and Biogen all have plans to raise prices in January. California law calls for companies to file notifications about price increases over 16 percent during a two-year period 60 days before they are set to go into effect. Those documents were filed in November, Reuters said. The documents that Reuters reviewed were from the state’s Correctional Health Care Services, which spend about $3 billion annually on medication for inmates.
As of now, there are few details gleaned from the state documents as to which drugs the various companies intend to increase prices. However, Reuters said Novartis and Bayer provided some specifics.
Novartis will increase the prices of more than 30 drugs that cover more than 100 different indications. The increases will range from 4.5 percent to 9.9 percent. Drugs on the list include Gilenya, a treatment for multiple sclerosis, leukemia drug Tasigna and psoriatic arthritis treatment Cosentyx, Reuters said. Diovan, a branded blood pressure drug, will also be increased. What makes that one especially interesting is that Diovan is a branded version of valsartan, which has seen a shortage this year following various recalls due to the discovery of carcinogens in active ingredients.
Novartis spokesman Eric Althoff told Reuters that the company “plans to raise U.S. list prices on 14 percent of the medicines it sells in the country in 2019, for an average increase of 4.7 percent on those drugs.” The drugs that Novartis plans to increase the prices on are keys to the company’s $20 billion forecasted revenue for 2019.
Bayer AG will increase the price on six of its drugs in January. Most of those are birth control products, Reuters said. The price increases will average about 5 percent.
The drug companies have argues that while they are increasing the price of those drugs, rebates and discounts that consumers use have grown at a faster pace. With that argument in hand, Novartis’ Althoff told Reuters that the Swiss pharma giant “expects a net price decrease of nearly 5 percent across the whole U.S. portfolio.” Bayer AG also said the same thing, Reuters noted. Many other companies declined to comment for the article. Allegan did tell Reuters that its price increases will be in line with the company’s 2016 pledge to limit price increases to less than 10 percent annually.