Pharma companies and pharmacy benefit managers have engaged in a back-and-forth for months over who’s to blame for high drug prices. Drugmakers say they’re raising prices largely to keep ahead of PBMs and their ever-increasing demands for rebates.
But now, one analyst is pointing to two increases—both involving cancer drugs—as evidence that drugmakers sometimes raise prices simply “because they can.”
Bernstein’s Ronny Gal reports that Amgen hiked its Blincyto list price by 3.9% late last month, after a separate increase in January. The drug’s price has grown by 8% this year, Gal said in an investor note. Meanwhile, Teva raised its Treanda price by 4.5% on July 1 after a January hike of 3%. So far this year, Teva has raised the price of Treanda 7.6%, the analyst notes.
The meds treat different types of leukemia. Teva’s Treanda also treats non-Hodgkin lymphoma (NHL).
A Teva spokesperson said Treanda’s price is “reflective of the value it provides to patients, providers and patients in the treatment of [chronic lymphocytic leukemia] and NHL that has progressed.” She added that the drug is available at a discount of nearly 50% for patients treated at hospitals subject to the government’s 340B discount program, “which makes up the majority of the product’s volume in hospitals, the largest customer segment by volume.” Amgen didn’t respond to a request for comment by press time.
While incremental price hikes may not make as many headlines as those in the hundreds or thousands of percentages, when it comes to cancer drugs, they’re particularly telling, Gal said.
“Notice that in this segment, where rebates are uncommon, drug companies continue to price up at high single digits,” the analyst wrote. “This is the strongest data point for those who argue drug companies raise prices ‘because they can’ and not because they are forced to do so by PBMs.”
Pharma companies and PBMs have contended for months as drug pricing scrutiny has heated up in Washington, D.C., and around the country. The drug industry says growing rebates and discounts are forcing prices higher, while PBMs say their tough negotiating tools save billions in healthcare spending.
Back in January, a drug industry-sponsored study found that rebates and discounts to industry middlemen grew to $106 billion in 2015, up from $67 billion in 2013. Since then, several drugmakers have released “transparency reports” showing the effects of growing rebates on their businesses.
In one high-profile exchange between the two sides of the debate, execs for Gilead Sciences and top PBM Express Scripts traded barbs over drug-pricing dynamics. Gilead’s exec said PBMs count on high drug prices to trigger high rebates—which they then profit on. Express Scripts’ representative countered, saying drug companies always set their own prices and PBMs work to drive prices down.
Amgen and Teva certainly aren’t alone among top pharma players in raising their prices. Back in February, an Express Scripts report concluded that branded pharmaceutical prices grew 11% last year despite an ongoing pricing firestorm. Increasing attention to the issue has resulted in a number of efforts aimed at tackling drug costs in Congress and in states around the country.
Meanwhile, the Trump Administration is reportedly preparing an executive order on drug prices that critics say doesn’t address the issue, but favors the industry. Those discussions are ongoing and could change.
By Eric Sagonowsky
Source: Fierce Pharma
The appointment makes Tuyen Ong the latest in a series of new CEO-partners hired by Flagship. Flagship Pioneering has named Tuyen Ong as CEO-partner. The new role sees the ex-Biogen […]
The COVID-19 pandemic has millennials worried—and that has them planning to buy more prescription drugs in the future, new research finds. WPP’s global media group, Mindshare, began surveying consumers in […]
AstraZeneca has received an investment of approximately $486m from the US Government to develop and supply its long-acting antibody (LAAB) cocktail, AZD7442, for Covid-19 treatment. AstraZeneca has received an investment […]