DECEMBER
19, 2018 / 6:28 PM / 8 DAYS AGO
NEW YORK/SAN FRANCISCO
(Reuters) - Novartis AG (NOVN.S) and Bayer AG (BAYGn.DE) are among nearly 30 drugmakers that have taken steps to raise
the U.S. prices of their medicines in January, ending a self-declared halt to
increases made by a pharma industry under pressure from the Trump
administration, according to documents seen by Reuters.
Other drugmakers set
to raise prices at the start of 2019 include Allergan Plc (AGN.N), GlaxoSmithKline Plc (GSK.L), Amgen Inc (AMGN.O), AstraZeneca Plc (AZN.L) and Biogen Inc (BIIB.O), the documents show.
The hikes will pose a
new challenge to President Donald Trump’s pledge to lower the costs of
prescription medications in the world’s most expensive pharmaceutical market.
The U.S. Department of
Health and Human Services (HHS) has proposed a slew of policies aimed at
lowering prices and passing more of the discounts negotiated by health insurers
on to patients. Those measures are not expected to provide relief to consumers
in the short-term, however, and fall short of giving government health agencies
direct authority to negotiate or regulate drug prices.
Twenty-eight
drugmakers filed notifications with California agencies in early November
disclosing that they planned to raise prices in 60 days or longer. Under a
state law passed last year, companies are required to notify payers in
California if they intend to raise the U.S. list price on any drug by more
than 16 percent over a two-year period.
The details were
provided to Reuters in response to a public records request to California
Correctional Health Care Services, which provides healthcare services to the
state’s corrections department. The department spends more than $3 billion
annually on drugs for inmates, more than any other state.
“Requests and public
shaming haven’t worked” to lower drug prices, said Michael Rea, chief executive
of RX Savings Solutions, which helps health plans and employers seek lower cost
prescription medicines. “We expect the number of 2019 increases to be even
greater than in past years.”
Pfizer Inc rolled back
planned price increases in July after President Trump said in a tweet that the
drugmaker “should be ashamed” and that his administration would respond to the
hikes.
Pfizer said it would
defer hikes until January 2019 to support the administration as it pursued its
new pricing policies. Pfizer’s move prompted many of its industry peers,
including Bayer, Novartis, Allergan, AstraZeneca and Amgen, to follow suit.
Drug price increases
implemented by the 20 biggest drugmakers did slow down during the second half
of 2018, with those companies raising prices on just over half the number of
drugs as in 2017, according to data compiled by consultancy RX Savings
Solutions.
Pfizer has already
announced plans to hike prices on 41 of its drugs in mid-January.
60-DAY
NOTICE
The California
corrections department documents indicate that the companies plan to increase
prices as early as Jan. 1. Most do not detail for which drugs or by how much,
but specific details were given in the case of Novartis and Bayer.
Novartis is planning
to raise prices on more than 100 indications of over 30 different drugs in
January, the documents show, with increases ranging from 4.5 percent to 9.9
percent. Drugs on the list are expected to account for more than $20 billion of
Novartis’ revenue this year and include multiple sclerosis drug Gilenya,
psoriatic arthritis treatment Cosentyx, and leukemia treatment Tasigna.
The list also includes
Diovan, the brand name version of blood pressure treatment valsartan, generic
versions of which are currently in shortage after a potential carcinogen was
detected in active ingredients made in China, prompting widespread recalls.
Novartis spokesman
Eric Althoff said the company plans to raise U.S. list prices on 14 percent of
the medicines it sells in the country in 2019, for an average increase of 4.7
percent on those drugs.
“Our rebates and discounts, however, continue
to grow even faster,” Althoff said. As a result, the company expects a net
price decrease of nearly 5 percent across the whole U.S. portfolio, he said.
Over the last three
years, net price decreases for its U.S. business have ranged from 2 percent to
2.6 percent, the company said.
Bayer filed
notifications with California agencies to increase prices on six of its drugs
in January, many of which are birth control products. Most of these price
increases are 5 percent.
Bayer said that the
U.S. wholesale price of its products are not representative of what most
consumers pay and that “list price increases are expected to be offset by
higher rebates and discounts paid to insurance companies and pharmacy benefit
managers.”
Amgen did not respond
to requests for comment. AstraZeneca and Biogen declined to comment for this
story.
GSK would not give
details about its specific price increases, which are set to take effect on or
around Jan. 1 and could change before then. Allergan said that all of its price
increases will be aligned with its pledge made in 2016 to limit drug price
increases on its products to less than 10 percent annually.
The United States,
which leaves drug pricing to market competition, has higher drug prices than in
other countries where governments directly or indirectly control the costs,
making it the world’s most lucrative market for manufacturers.
Lowering prescription
drug prices was a top priority in Republican Trump’s 2016 presidential
campaign. Rival Democrats are expected to step up congressional scrutiny of
drug price hikes next year after gaining control of the U.S. House of
Representatives in elections in November.
“Drug companies
raising their prices and offsetting them with higher rebates benefits everyone
but the consumer,” HHS spokeswoman Caitlin Oakley said in a statement.
Trump and HHS
Secretary Alex Azar “remain committed to lowering drug prices and reducing out
of pocket costs, and will continue to take bold action to restructure this
broken market,” she said.
Reporting by Michael Erman in New York and
Robin Respaut in San Francisco; Editing by Michele Gershberg and Sonya
Hepinstall
Our
Standards:The Thomson Reuters Trust Principles.
https://www.reuters.com/article/us-usa-drugpricing-exclusive/exclusive-big-pharma-returning-to-us-price-hikes-in-january-after-pause-idUSKCN1OJ01E?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_campaign=AIS%20Health%20Daily&utm_source=hs_email&utm_source=hs_email&utm_medium=email&utm_medium=email&utm_content=68508942&utm_content=68535326&_hsenc=p2ANqtz-9OavWpQ4k95kBUZlSpYsme81_ZnW07kJHmqPAhQAkZTaQMNhcqJdbc6ZRGTXcslmTuSGjLd_n11prW216aXdJgfpUIxA&_hsmi=68508942&_hsenc=p2ANqtz-8j8ZRUzLJkON-FLwOQ2_PMe4BDQq4D6jrDLB0DdVaymRo0tpJ7Kaquqz8KMRrVg7L6WnCijCIpPLEOnQWt7rzXVN8MPg&_hsmi=68535326
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