- AbbVie raised the list prices of many of its drugs on Jan. 1, while Biogen hiked the price tag of its old multiple sclerosis treatment Tysabri, part of broad, sector-wide increases typically taken at the start of a new year. The hikes could feature in calls for drug pricing legislation as a new Congress and new administration begin work.
- About 70 drugmakers raised prices to open 2021, averaging around 3.3%, lower than the average boost of 5.8% at the beginning of 2020, according to an analysis by RX Savings Solutions. The effect on prices seen by consumers is likely to be more limited, however, since insurers negotiate discounts off list prices.
- In his campaign, president-elect Joseph Biden endorsed controlling drug prices by allowing Medicare to negotiate directly with drug companies, something the program is barred from doing now. Congress is likely to begin debating such a plan once again, along with alternative proposals like imposing rebates on drugs when price increases outpace inflation.
Drug list price increases, which usually are announced at the beginning and middle of the year, are a closely watched number. They are not, however, a true gauge of how much more insurers or consumers will pay, due to the rebates and discounts that insurers ask from drugmakers in exchange for coverage.
In a Jan. 3 note to clients, Piper Sandler analyst Christopher Raymond noted that the gap between the list price and what insurers pay — the "net price" — has grown in recent years, adding that as a rule of thumb the net price increase should be assumed to be roughly half as big.
Nonetheless, some of the increases are large. AbbVie, which is seeking to boost revenues ahead of patent expiration for its flagship drug Humira, hiked list prices of its newer autoimmune medicines Skyrizi and Rinvoq and cancer treatment Imbruvica by 7.4%. Abbvie also added 5% to the price of eye drug Restasis and gastrointestinal drug Linzess, Raymond wrote, citing Wolters Kluwer Health.
Biogen, which has faced competition to its multiple sclerosis business and lost market exclusivity for its top-seller Tecfidera last year, boosted the list price of Tysabri 5.3%, following two separate 3.5% hikes in 2020, Raymond wrote.
Some patents protecting Tysabri lapsed in 2015, but another covers the drug through 2023. Novartis' Sandoz generics division is nearing the conclusion of late-stage testing of a biosimilar, which could conceivably put a challenger on the market after that patent expires.
Rx Savings Solutions' analysis, meanwhile, showed drugmakers increased prices on 50% more products to open 2021 than they did in 2020.
Pfizer and Sanofi acknowledged in statements price increases that matched industry benchmarks. A Pfizer spokesperson said the company's list price increases, on about 200 products, were in line with overall inflation rates of 1.3%, and that net prices were flat or declining because of rebates and discounts.
Sanofi said it pegged its list price increases to the U.S. government's national health expenditures forecast of 5.1%, and that every increase was at or below that level. Average net prices have decreased every year since 2016, the company said.
The federal Bureau of Labor Statistics reported that prescription drug prices on average fell through the first 11 months of 2020.
Correction: A previous version of this article misstated when Tysabri's patent protection expired, and when biosimilar competitors could potentially launch.