Price hikes have landed pharma in hot water lately, with lawmakers, the public and presidential hopefuls lashing out at companies over skyrocketing costs. But things could calm down a bit in the new year, according to some analysts, who see price increases for branded drugs tapering off in 2016.
2015 was a “high water mark” year for list price growth, Deutsche Bank analysts Gregg Gilbert and Greg Fraser said in a note to investors. Price increases for specialty pharma reached a 4-year high last year, but the trend petered off a bit late in the year after companies such as Valeant Pharmaceuticals ($VRX) came under intense scrutiny for their price-setting ways.
Overall, the analysts said their calculations for compounded, weighted average price growth was 25% in 2015 for specialty pharma and 14% for what it calls the U.S. major pharma group. Those numbers compare to increases of 25% and 11% respectively just four years ago. Based on list prices, Valeant’s 97% for compounded, weighted average price increases led the specialty pharma group, while Eli Lilly led major pharma with 16.4% and Pfizer was not far behind with 15.4%
There were, however, “fewer and smaller price increases” in Q4 2015 compared to Q4 2014, the analysts said. And four companies including Valeant, Mallinckrodt, Jazz Pharmaceuticals and Akorn did not post any price increases after September 2015. The trend isn’t “particularly surprising” in Valeant’s case given that the company’s top execs said that they would bring down prices in 2016, the analysts wrote in their note.
While the price increases may have stopped or slowed for some companies, Valeant and its pharma peers are still facing the after effects of last year’s drug pricing brouhaha. In August, Rep. Elijah Cummings (D-MD) and Sen. Bernie Sanders (D-VT) went after Valeant for price hikes on two of its cardio meds, Isuprel and Nitropress, whose prices the company jacked up by 525% and 212%, respectively. Sen. Claire McCaskill (D-MO) also took the company to task for price increases, recently heading up a probe to look into “dramatic increases” in prices that look like “little more than price gouging” McCaskill said at the time.
Presidential candidates are also weighing in on the debate, with Democratic hopefuls such as Sanders and Hillary Clinton taking aim at sky-high prices. Clinton and Sanders have both laid out measures to fight rising prices, including giving Medicare the power to negotiate directly with drugmakers and allowing Americans to buy drugs from other countries that offer lower prices. And pharma could remain in the hot seat as election season kicks into high gear, and candidates in both parties respond to calls for pricing reform.
By Emily Wasserman
Source: Fierce Pharma
Belgian companies account for just under a quarter (24%) of the total stock market value of all public biotech companies in Europe.
Johnson & Johnson is re-upping its commitment to addressing health inequities as the pandemic lays bare long-standing divisions.
It’s estimated that 10% to 15% of people with Parkinson’s have a genetic form of the disease and Sanofi Genzyme is backing a new study to help find those people.