Drug Companies Raise Prices to Start New Year

Prices increases by Allergan, Bristol-Myers Squibb and Eli Lilly range from 6% to nearly 10%.

Many of the pharmaceutical companies that delayed the introduction of price increases in 2018 in response to the public interactions between President Donald Trump and Pfizer have implemented those increases effective January 1, 2019.

Allergan introduced the most aggressive increases, with the list prices of 27 different drugs going up 9.5% and an additional 234 increasing by 4.9%. Biogen and Bristol-Myers Squibb opted for a more modest 6% increase on products, including Tecfidera and Eliquis and Orencia and Sprycel, respectively.

It has been common practice for pharma companies to implement price hikes in January. Notably, the pressure raised about this issue by Congress and the public seems to have had some impact, according to a study reported by investment bank Raymond James, which found that fewer price increases were instituted from December 1, 2018 to January 1, 2019 than in similar periods in the past.

Pfizer announced price hikes near 5% on 41 of its drugs back in November 2018. 

All of the pharma companies report that, despite the rise in list prices, the net cost to patients will be limited. They work with pharmacy benefit managers and insurance companies/payers to minimize out-of-pocket costs and claim that net prices in some cases have actually fallen despite price increases.

The institution of further price increases by some companies — despite criticism of the industry — reflects the dependency that drug companies have on price hikes for profit growth. A few firms have been more selective in implementing prices increases in response to the public outcry. Others, including Celgene, Amgen and Gilead Sciences, are holding off for the time being.

Overall, according to Raymond James, between December 1, 3018 and January 1, 2019, prices were raised on 108 drugs –– nearly half as many as the same period a year ago (197). The average increase is also lower: 6% vs. 8.1%.

Nice Insight

Nice Insight, established in 2010, is the research division of That’s Nice, A Science Agency, providing data and analysis from proprietary annual surveys, custom primary qualitative and quantitative research as well as extensive secondary research. Current annual surveys include The Nice Insight Contract Development & Manufacturing (CDMO/CMO), Survey The Nice Insight Contract Research - Preclinical and Clinical (CRO) Survey, The Nice Insight Pharmaceutical Equipment Survey, and The Nice Insight Pharmaceutical Excipients Survey.