Drug manufacturers will increase the prices of 350 drugs in early 2023.
Pfizer, GlaxoSmithKline PLC, Bristol Myers Squibb, AstraZeneca PLC and Sanofi SA are among several drugmakers set to hike prices, according to health research firm 3 Axis Advisors, Portal reported. The price increases are in response to a number of factors, primarily inflation, supply concerns and the Biden administration’s Anti-Inflation Act, which will allow Medicare, the national government’s health insurance program for seniors and people with certain disabilities, to negotiate multiple drug prices directly beginning in 2026.
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Drug manufacturers usually try to avoid major price hikes as this draws the ire of government and the public. Nevertheless, a partner company of 3 Axis Advisors found that drug manufacturers raised the prices of 1,400 different drugs in 2022. Pharmaceutical companies now usually try to introduce new drugs at a high price, so further price increases are not necessary.
“Drug makers need to put more effort into calibrating those introductory prices from the start…so they don’t push themselves to the point where they can’t raise prices in the future to get back to profitability,” said Antonio Ciaccia, President of 3 Axis Advisors to Portal.
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Price hikes in January are not expected to be dramatic as none of them exceed 10%. However, the prices of many drugs being raised are already at astronomical levels — Bristol Myers Squibb’s cell therapies Abecma and Breyanzi, which treat blood cancers, are set to rise 9% despite already costing more than $400,000.