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Pharmaceutical companies have already raised the price of over 800 brand-name prescription drugs this year.
Nearly all the price increases are under 10%, with the median increase across all the affected medications being 4%, slightly below the 4.5% median increase from last year, the Wall Street Journal reported Tuesday, citing data from the nonprofit drug-pricing research firm 46brooklyn.
The increases apply to list prices before accounting for insurance, rebates to pharmacy benefit managers, or other discounts.
This year’s increases reflect a significant increase from Dec. 29 of last year, when drugmakers had shared plans to raise prices on just over 140 brands. More price hikes are also expected to be announced through the end of January, historically the busiest month for drugmakers to make increases. This is also a sizable increase from an earlier 46brooklyn analysis this month, when only about 250 drug price hikes had been announced.
The largest price increases came from Leadiant Pharmaceuticals, a subsidiary of Italy-based Essetifin. Leadiant raised prices by approximately 15% to $149 per pill of Matulane, a Hodgkin disease treatment, and by about 20% to $2,597 on Cystaran, eye drops used to manage symptoms of the rare condition cystinosis.
Drug makers also raised the prices of some popular diabetes and weight-loss drugs by about 3%. For example, Eli Lilly’s (LLY+1.28%) Zepbound now costs $1,086 a month, up from a previous $1,059.
Significant drug price hikes were once much more common in the U.S., but in recent years, pharmaceutical companies have scaled them back following backlash during the mid-2010s.
This shift also coincided with the 2022 Inflation Reduction Act, which requires drug manufacturers to pay rebates to the government for price increases that exceed the inflation rate on medications covered by Medicare.
In response, some pharmaceutical companies have adjusted their strategy by introducing new drugs at higher launch prices and embracing treatments for rare diseases, also called orphan diseases. These illnesses typically affect a small population, usually 200,000 or less. Drug companies can leverage a lack of alternative treatments for these diseases to justify high prices.
TD Cowen’s (TD+0.40%) 30th Annual Drug Pricing survey found that the cost of prescription drugs is likely to climb in 2025 and beyond. The investment bank polled 27 health maintenance organizations, pharmacy benefit managers, and hospitals during the fourth quarter of 2024, post-election. This group was responsible for about one-fourth of total U.S. drug spending in 2024 — about $179 billion. The respondents expressed a general consensus that drug prices are likely to continue rising steadily, fueled by a pipeline of high-cost treatments.