New drugs come at a high price, study finds

Nearly half of all drugs launched in the past two years initially cost more than $150,000 a year, according to new research that comes as Congress renews talks on controlling drug prices.

Why is this important: The “exponential” growth during the pandemic offers more stark evidence of how pharmaceutical companies have increased costs in the face of legislators’ wishes to pass price controls and even add them to COVID relief packages.

By the numbers: From 2008 to 2021, introductory prices for new drugs have increased by 20% per year, according to the research letter published in JAMA Tuesday.

  • Prices rose 11% annually in 2020-21, even after adjusting for manufacturer rebates and a move toward more oncology and specialty drugs, said researchers from the Regulatory Program, the Therapy and Law from Brigham and Women’s Hospital.
  • In contrast, overall health expenditures typically increase by around 5% per year.
  • Earlier this year, pharmaceutical companies raised the prices of hundreds of existing drugs, with most prices rising by an average of 5-6%.

Between the lines: The researchers argue for the kind of forward-looking Medicare drug price negotiations that are back in play as congressional Democrats struggle to hammer out a lean Build Back Better package.

It was a non-runner for the GOPas well as the pharmaceutical industry, which says it could have a chilling effect on innovation.

The big picture: Key centrist Democratic Sen. Joe Manchin signaled he was open to discussing a prescription drug pricing deal at an AARP event.

  • “By allowing Medicare to negotiate drug prices, capping the cost of insulin at $35 per month, and allowing drugs to be imported from Canada, we can reduce prescription drug prices in the United States” , Manchin told AARP West Virginia members Last week.
  • Manchin and Senate Majority Leader Chuck Schumer discuss a revised bill that would include, among other things, drug pricing provisions from a BBB passed by the House and bring the 50 most popular drugs up for negotiation. highest spenders in Medicare. Medicines should be single-source, with no generic equivalent.

Yes, but: We have heard this kind of talk many times before. Even with Democrats keen to win ahead of the midterm elections — and with compelling data on rising drug costs — little has changed in months and the outcome is far from certain, according to Cowen analyst Rick Weissenstein.

Richard L. Militello