Despite growing criticism from consumers and policymakers, some of the largest drugmakers continued to raise the costs of prescription medications by 10 percent through 2016, according to The Wall Street Journal.
Since late December, Pfizer, Amgen, Allergan, Horizon Pharma and other drug companies raised U.S. prices for dozens brand-name drugs, with many increases ranging between 9 and 10 percent, which could add thousands of dollars to already expensive drugs, according to the report. The increases are applied to list prices before rebates are discounts.
Here are six key notes from the report.
1. Raising drug prices around Jan. 1 has been common practice for many pharmaceutical companies over the last few years. However, the price hikes in 2016 so far are significant because they represent a demonstration of the industry's pricing power in the midst of mounting political pressure, according to the report.
2. For instance, Vanda Pharmaceuticals on Jan. 1 raised the price of Hetlioz, its new drug that treats a certain sleep disorder affecting blind people, by $148,000 a year, according to the report. The price of the once-daily medication is now 76 percent higher than when it was first unveiled in 2014, Piper Jaffray analysts said. Pfizer raised the list prices for more than 60 products with annual U.S. sales of at least $10 million by an average of 10.6 percent, Deutsche Bank told WSJ. A Pfizer spokesperson said the company offers "considerable discounts" off of these prices, as well as free medication to certain patients who meet income criteria, according to the report.
Allergan, which plans to be acquired by Pfizer for $160 billion in the second half of 2016, raised prices by an average of 9.1 percent for more than 40 brands since Jan. 1 and left the prices for about 20 other brands unchanged.
3. Politicians, health insurance companies, healthcare providers and patients alike have criticized the rising drug prices in recent months. Presidential candidates Bernie Sanders, Hillary Clinton and Marco Rubio have all spoken out on the issue. U.S. prescription drug spending climbed by 12.2 percent in 2014, compared to 2.4 percent growth in 2013, according to CMS data.
4. While discounts and rebates are designed to partially offset some of the price growth, repeated price increases can eventually negate the value of the discounts, Rick Bruzek, vice president of pharmacy services at Bloomington, Minn.-based HealthPartners, told WSJ. "Really, you're swimming upstream," he said.
5. Although drugmakers say they need to keep raising drug prices to fund research, healthcare providers, insurers and patient advocates say the price hikes are setting important medications out of many people's reach. Mary Brainerd, CEO of HealthPartners, said the rising prices "are becoming increasingly intolerable for consumers, health plans, doctors and hospitals," according to the report.
6. Unlike some of its peers, Valeant Pharmaceuticals hasn't raised its prices since September. A Valeant spokesperson told WSJ changes in the company's products have made pricing a smaller aspect of its expected sales growth, and the company subsequently canceled nearly all of its planned price increases for the fourth quarter.