President Trump has shamed some of the world’s biggest drugmakers into curbing plans to raise prices this year.
Keeping those promises likely won’t cost the companies very much.
Roche Holding AG said in July that it wouldn’t enact any more increases this year—after hiking prices twice earlier in 2018 on nine of its products, including its blockbuster cancer drugs Herceptin, Rituxan, and Avastin.
Merck & Co., one of the U.S.’s top three drugmakers by sales, said July 19 it would cut prices for a handful of small products. But one Wall Street analyst estimated that the cuts accounted for just 0.1 percent of Merck’s revenue. The company also slashed the price of a hepatitis C treatment whose sales were already in steep decline.
On June 25, Celgene Corp. said it wouldn’t raise prices more than once a year, and only at the rate of health-care inflation. The promise came after it boosted the price of its top-selling cancer drug, Revlimid, by 37 percent over three years. Two weeks after the announcement, it took an additional 5 percent increase on Revlimid.
Long-term, prices keep going up: 255 brand drugs had increases between Feb. 1 and July 15, according to the drug pricing website GoodRx. The most common increase in that window was for 9 to 10 percent, a threshold that some companies have promised not to exceed.
Note: Pfizer drugs whose price hikes were reversed are excluded.
“It shows they generally take advantage of the price increases they feel they can put in place without causing too much of a stir,” said Jeroen van Meijgaard, a health economist at GoodRx.
Last month, Bloomberg introduced a tool to track what’s happened to prices for some of the most widely used, best-known drugs in the world since Trump began talking about them as a candidate, then as President. It’s a look at whether Trump’s rhetoric on prices since he was elected has had a major impact on pharmaceutical prices.
The prices for 40 commonly used drugs in six categories—diabetes, cancer, HIV, multiple sclerosis, asthma and chronic obstructive pulmonary disease, and autoimmune diseases such as rheumatoid arthritis and psoriasis—are compared over a three-year period. Starting from June 2015, the month Trump declared his candidacy for president and shortly before scandals flared over pricing moves by “Pharma Bro” Martin Shkreli and Valeant Pharmaceuticals International Inc., now known as Bausch Health Companies Inc., the indexes track the average percent increase in drug prices through late June 2018. Prices are based on data from Connecture Inc.
For all six categories of drugs, list prices rose far faster than inflation. Prices for 10 commonly used diabetes drugs rose 25.6 percent, on average, while average prices for rheumatoid arthritis and other autoimmune treatments rose 40.1 percent.
The latter category includes AbbVie Inc.’s Humira, the biggest-selling drug in the world. Prices for the injection soared 52 percent on five separate price increases.
Another drug with an unusually big increase in the period was Bayer AG’s liver cancer pill Nexavar, whose cost rose 51 percent on six separate price hikes, to $155.59 per pill, according to Connecture. Nexavar now costs $18,670 per month for patients who take the typical dose.
Bloomberg News will update these indexes periodically throughout the year as prices change. Drug companies regularly increase prices often at the beginning of each year, and often mid-year as well.
The indexes focus on list prices, not confidential rebates drug companies negotiate with insurers and drug plans to gain better coverage. While drug companies provide big discounts on many classes of drugs, including medicines for diabetes and asthma, patients often don’t share in these rebates.
The indexes predominantly include self-administered drugs that tend to be covered under a patient’s drug benefit. Patients tend to be more exposed to the costs of these drugs, compared to medicines given in the hospital or doctor’s office.
The Trump administration has said it’s committed to getting prices down. The list prices matter. Makers of some drugs for cancer and multiple sclerosis provide virtually no discount at all, benefit managers say. The list prices can determine how much patients in Medicare, high-deductible plans, or without insurance have to pay for their drugs out of their own pockets.