As Democratic members of Congress proposed legislation to curb soaring drug prices on Thursday, the world’s biggest drugmaker by revenue Johnson & Johnson $JNJ raised prices for about two dozen of its prescription medicines, adding to the hundreds of price hikes already initiated by various drugmakers in 2019.
Most of the increases on J&J’s drugs — including top-sellers psoriasis drug Stelara, cancer drug Zytiga and blood thinner Xarelto — were between 6% and 7%, according to a report by Reuters, citing data from Rx Savings Solutions, which helps health plans, employers and employees seek cheaper prescription medicines.
The Band-Aid maker is not planning to raise the prices on any more of its drugs this year, J&J told Reuters. Among large biopharma companies, J&J is one of the least dependent on drug price hikes for growth, according to a recent analysis published by Leerink.
Allergan $AGN, Pfizer $PFE, Bristol-Myers Squibb $BMY, Biogen $BIIB, Sanofi $SNY, Novo Nordisk $NVO and other top drugmakers all greeted 2019 with price hikes, although data suggest that in general, drugmakers are slowing the size and frequency of price hikes as political, media and public scrutiny into pricing intensifies.
Between January 2 and January 10, the number of drugs whose prices had been raised rose from more than 250 medicines to close to 490, according to Rx Savings, as cited by Reuters.
The United States is by far the most lucrative market for drugmakers — unlike many other high-income nations — where the government does not directly influence pricing policy, relying instead on competition.
In the UK for instance, NICE determines whether a medicine is cost-effective — if that threshold is not met, the drug is usually not introduced into the national health service. The pharmaceutical industry in the United States is critical of the UK model, asserting the practice stifles the pace of medical innovation and patients are robbed of access to important medicines. Aside from the high risk and cost of R&D, US drugmakers also justify their policy of higher US prices because they have to negotiate with middlemen in the form of pharmacy benefit managers.
In recent years, the spotlight on pharmaceutical price gouging has inspired a number of US lawmakers, as well as the current Trump administration to propose legislation to temper hikes, and increase the government’s ability to influence drug prices.
Representative Elijah Cummings, chairman of the Congressional committee on oversight and reform, who reintroduced some of bills taking aim at “skyrocketing” drug prices as part of a legislative package on Thursday, announced that a hearing on prescription drug prices was scheduled to take place on January 29.
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