Pharmaceutical companies raised the list prices of hundreds and hundreds of drugs in January 2024. While that figure is down from previous years, the recent price hikes have caught the attention of the US Senate Health Committee, which wants to hear testimonies from big pharma CEOs about why Americans pay the highest prices in the world for prescription drugs.
To herald in the new year, drugmakers often jack up their prices on January 1 – and 2024 was no different. On January 1, 453 branded drugs increased in cost, according to data analysis by drug price transparency NGO 46brooklyn Research.
That’s similar to January 1, 2023, which saw 452 brand-name drugs up in price – but it’s significantly down from 2022 and 2021, which saw 540 and 602 drug price increases respectively.
More followed the New Year’s Day price hike. According to further analysis for the Wall Street Journal (WSJ) by 46brooklyn Research, 775 brand-name drugs underwent raised list prices during the first half of January 2024.
The drug companies reportedly raised the prices by a median of 4.5 percent, which is higher than the rate of inflation.
Some of the most prominent price rises involved the asthma medication Xolair and the Shingles vaccine Shingrix, which saw price increases of over 7.5 percent, as per the WSJ analysis. Cancer-treating medications – such as Verzenio, Ibrance, and Pomalyst – also saw surges in price over 5 percent.
Ozempic, a diabetes treatment that has become an in-vogue weight-loss drug, has also risen in price by 3.5 percent. That means a month’s supply reportedly now costs $970.
Bear in mind that drug prices and pharmaceutical markets are deeply complex beasts, especially in the US due to private healthcare. Rises in drug list prices don’t necessarily mean people will be paying more at the pharmacy counter or through their health insurance plans. Likewise, a price hike doesn’t always mean that a drugmaker will be profiting more.
As 46brooklyn Research explains: “Tracking drug prices is an exercise fraught with complication due to the fact that pricing is more of a range of experiences (see price discrimination) rather than something that is a consistent, transparent, shared experience among purchasers. And even with something as surface level as tracking list prices, there are many ways to view and contextualize what’s happening from an overall system impact perspective.”
There were also some notable decreases in drug prices this January. At least 24 products became cheaper in January which 46brooklyn Research described as “nearly unprecedented.”
The subject of drug prices has recently caught the attention of Senate health committee chair Bernie Sanders.
On January 25, the Senate Health Committee intended to hold a hearing called: “Why Does the United States Pay, By Far, The Highest Prices In The World For Prescription Drugs?”. As reported by STAT News, Johnson & Johnson CEO Joaquin Duato, Merck CEO Robert Davis, and Bristol Myers Squibb CEO Chris Boerner were asked to testify about why consumers in the US pay higher prices for drugs compared with other countries.
However, it didn’t go ahead because the CEOs of Johnson & Johnson and Merck declined the invite. The Bristol Myers Squibb CEO then ducked out of the hearing on the grounds he would only participate if at least one other pharma CEO was present.
Bernie is now set to hold a committee vote on whether to issue the two subpoenas to the CEOs of Johnson & Johnson and Merck, forcing them to testify, according to STAT. If that goes ahead, it will be the first time the health committee has issued a subpoena in more than 40 years.
“The American people have a right to know why it is that they pay, by far, the highest prices in the world for prescription drugs while the pharmaceutical industry in the US makes hundreds of billions in profits and pays their CEOs tens of millions of dollars in compensation,” Chairman Sanders said in a statement published November 2023.
"A life-saving drug is not effective if the patient who needs that drug cannot afford it," he added.