Big Pharma kicked off 2024 with hundreds of price hikes for new drugs despite the Biden Administration’s promises of keeping pharmaceutical costs down.
According to a report released Friday, pharmaceutical companies set median starting list prices 35 percent higher in 2023 than the previous year.
In 2022, the median list price for a drug being placed on the market was $222,000. Compare that to 2023, where the median drug price spiked to $300,000 despite the Biden Administration stating one of its goals was to keep pharmaceutical costs affordable for Americans.
President Joe Biden has announced plans to impose automatic rebates to Medicare for drugmakers that raise their prices faster than the rate of inflation—which does not cover the starting list price— and the President’s Inflation Reduction Act (IRA). However, Pfizer, Sanofi, and Takeda have raised prices on more than 500 drug doses and formulations this month alone.
More than 140 medicine brands also saw their prices increase in January.
In November 2021, Biden announced plans to keep drug prices down by putting a cap on the amount senior citizens and people with disabilities have to pay out-of-pocket for their prescriptions. In August of last year, the president vowed that ten drugs would be required to negotiate prices with Medicare or face up to a 95 percent sales tax.
Pfizer stood out for one of the most extensive January price hikes. Its cost increase was more than a quarter of all medicines included during the time frame. Reuters noted that the company has raised prices on at least 124 doses or formulations.
Pfizer and Hospira also plan to raise the prices of 30 and six branded drugs later this year.
In December, the Biden Administration revealed that 48 Medicare Part B drugs raised their prices faster than the inflation rate. This prompted automatic rebates to the government insurance program for payments made over the inflation rate, resulting from the Prescription Drug Inflation Rebate Program by the Department of Health and Human Services (HHS) as part of Biden’s IRA.
“There are reasons why Medicare and Medicaid have long histories of paying excessive prices for drugs: everyone in those programs is paying with someone else’s money, and nobody spends someone else’s money as carefully as they spend their own,” Michael Cannon, director of health policy studies at the Cato Institute told the DCNF. “That dynamic. Has. Not. Changed. These latest attempts to contain drug prices in Medicare will most likely fail, just as past attempts have. Medicare absolutely should pay less for prescription drugs. But it will probably continue to pay excessive prices — because that is its nature.”