Pharmaceutical companies set prices for new drugs in the U.S. 35% higher in 2023 than they did the prior year, according to a new analysis by Reuters.
The steep price hike comes as the industry is embracing treatments for rare disease, also called orphan diseases. These illnesses typically affect a small population, usually 200,000 or less. Drug companies are able to leverage a lack of alternative treatments for these diseases as justification for high prices.
The median annual list price for a new medication in 2023 was $300,000, up 35% from $222,000 in 2022. The median list price for about 30 new drugs in 2021 was $180,000.
This steady increase is also a result of the 2022 Inflation Reduction Act. The legislation requires drug manufacturers to pay the government rebates for any drug price increases above the inflation rate for medications covered by Medicare. In response, some pharma companies have responded by setting higher launch prices for new drugs.
The most expensive drugs approved in 2023
Cambridge, Massachusetts-based Sarepta’s drug Elevydis, a one-time, muscular dystrophy gene therapy treatment, was the most expensive drug approved by the FDA last year. Its annual list price came at a whopping $3.2 million. About 250,000 Americans have some form of muscular dystrophy.
Bluebird’s Lyfgenia, the company’s treatment for sickle cell disease, came in second with a list price of $3.1 million. The Centers for Disease Control and Prevention estimate that sickle cell disease affects about 100,000 Americans.
In third place was Roctavian, a treatment for the bleeding disorder hemophilia from BioMarin, which has a list price of $2.9 million. Its estimated that up to 33,000 American males are currently living with the disorder, according to the CDC.
It is important to note that the list price doesn’t necessarily equal the actual price patients pay. Drug manufacturers typically offer rebates and discounts to patients and insurers that lower the price of many medications.