President Donald Trump in May said that drugmakers would soon announce “massive” price cuts, and his administration rolled out a plan to bring down the cost of medicines. But the companies don’t appear to have gotten that message.
Bayer raised the price of two cancer drugs by hundreds of dollars in May and Novartis followed by boosting four pricey treatments in June. Pfizer, one of the largest U.S. pharmaceutical companies, announced increases on more than 41 products this week. They weren’t alone.
A Wells Fargo report found 104 price increases in June and the first two days of July, with an average jump of 31.5 percent and a median increase of 9.4 percent. That followed 48 increases in May. The list price hikes don’t factor in discounts that companies may provide to some insurance companies and patients.
The across-the-board increases cast doubt on whether Trump and Health and Human Services Secretary Alex Azar can pressure manufacturers to voluntarily drop prices without the threat of specific consequences.
Azar, in a May 14 speech rolling out the drug pricing plan, asserted Trump had “laid down a marker about the need for reform” and hinted there would be consequences for companies that raised prices for reasons other than inflation or a change in clinical benefit. “I can tell you I wouldn’t have wanted to be the one to do that,” the former Eli Lilly executive said.
Last week, Azar told the Senate Finance Committee he “hope[d]” companies will “exercise restraint” with midyear price increases.
Most of the recent price increases are well above the current U.S. inflation rate, which is less than 3 percent.
Health policy experts say one flaw with the administration’s plan is the lack of any serious follow-through.
“The industry isn’t taking the administration seriously on drug pricing because there doesn’t appear to be a credible threat if they don’t comply with these requests,” said Stacie Dusetzina, a drug pricing expert at Vanderbilt University School of Medicine. “While there are some items in the recently released Drug Pricing Blueprint that explore ways to incentivize companies to not increase prices or to increase accountability for price hikes, these are a long way from being implemented.”
Without any formal rule-making or legislating in the pipeline, any real incentive to change for the industry is likely years away.
Congressional Democrats have said they want sanctions on companies that raise prices past certain thresholds and are criticizing the administration for not doing enough.
“.@realDonalTrump and @SecAzar ‘hope’ Big Pharma stops raising prices. How’s that work out? Time for real action,” Sen. Ron Wyden, the top Democrat on the Finance Committee tweeted Tuesday, in response to Pfizer’s price increases.
It’s the second price hike this year for many of the drugs in question. Pfizer raised the cost of Viagra 9.44 percent in January and another 9.44 percent on July 1. A 30-pill bottle of the erectile dysfunction drug now costs more than $2,200.
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