As 2024 begins, it brings an all-too-familiar tradition from big drug companies: a tidal wave of price hikes on prescription drugs. Every year, big drug companies raise prices on hundreds of drugs – not because the drugs have improved, but merely because the calendar has changed.
These arbitrary drug price increases strain the health care system and jeopardize access to life-saving medications for millions of Americans. They also highlight the unilateral pricing power that big drug companies have not just over the pharmaceutical supply chain – but over the health and well-being of millions of Americans.
Some notable examples include:
- Sanofi raising prices on life-saving vaccines by 9%, including treatments for typhoid fever, rabies and yellow fever.
- The CDC estimated in 2019 that rabies vaccines typically cost anywhere from $1,200 to $6,500, but can range as high as $10,000.
- Pfizer increasing prices across its portfolio, forcing price hikes on over 145 drugs so far.
- This comes after Pfizer hiked the price of the lifesaving COVID-19 drug Paxlovid from $530 to $1,390, more than doubling the price for patients.
- Baxalta, owned by Japanese drugmaker Takeda, raising U.S. prices on 53 drugs. Meanwhile, brand drugs sell for less than one-third the average price in Japan.
When drugmakers increase their prices, Americans are forced to reckon with higher premiums, higher deductibles, and lower net wage growth – all to fund higher profits for Big Pharma. But Big Pharma has also shown that they can decrease their prices just as easily – when it suits them. For example, drugmakers announced last year they would lower prices on major insulin products in response to new government rules that penalized exorbitant price hikes that they had already taken.
But in 2024, some of those same companies are pushing through price increases on other drugs, including GLP-1 drugs for diabetes and weight loss, like Mounjaro. With a list price of over $1050 for one month, Mounjaro’s 4.5% price increase will cost patients an additional $577 in 2024. For an employer providing coverage to 2,000 employees and their families, that’s over $1 million in higher costs each year alone.
All this comes as Congress considers changes that will limit the pharmacy benefits that help patients afford these drugs. Americans can’t afford these bad policies. Instead, it’s time for Congress to step in and implement measures that promote competition, curb monopolistic behavior, and safeguard the well-being of patients.
CAPD’s research over the last two years has shown the massive savings available from preventing anticompetitive gamesmanship by drug companies. A recent study from Alex Brill found that the annual cost of just one patent thicket can run consumers as much as $7.6 billion in a single year. Patent thickets are groups of duplicative patents accumulated by brand drug companies looking to protect their monopolies. Ranging as high as hundreds of patents, they are used to keep generic or biosimilar competition out of the market.
As Congress returns, we urge elected representatives to prioritize the well-being of their constituents over Big Pharma’s profits. Policies that promote competition and limit anticompetitive behavior will help ensure Americans affordable access to the medications they need to get and stay healthy. They will also lower government spending as budget negotiations take center stage in Congress, offering a win for taxpayers.
To learn more, visit CAPD’s resources page.