Top pharmaceutical companies raised the list price on 775 brand-name drugs in just the first half of January, even as President Joe Biden aims to keep prices low, according to The Wall Street Journal.
The median price hike of the drugs was around 4.5%, with some rising by 10% or more, despite an inflation rate of 3.4% year-over-year in December, according to data from 46brooklyn Research acquired by the WSJ. The price hikes are in contrast to the president’s efforts to tame rising drug prices, taking actions such as imposing automatic rebates to Medicare for drugmakers that raise their prices faster than the price of inflation, which first went into effect in December, affecting 48 drugs covered under Medicare Part B. (RELATED: Inflation Under Biden Hiked The Massive National Debt In A New Way In 2023, Experts Say)
Dozens of commonly used drugs were the victims of price increases, including Ozempic and Mounjaro, according to the WSJ. Drugmaker Novo Nordisk noted that changes to list prices are in response to factors like market conditions and rising costs from inflation.
The percentage growth in the number of health care administrators compared to that in physicians: That tiny barely-visible yellow sliver at the bottom of the graph is the growth in physicians, and the towering Alpine peaks on top of it is the growth in administrators. pic.twitter.com/ZQLMDTrUiH
— i/o (@eyeslasho) January 17, 2024
Some experts predict that in response to the Biden administration’s attempt at controlling prices, drug manufacturers will raise prices on those with private insurance and also set list prices initially higher to circumvent price hike restrictions.
“Both the Medicare rebate program (the requirement to pay the government the difference between the increase in the drug price and the rate of inflation) and the Medicare drug price ‘negotiation’ program (in fact a very complex price control system) are designed to reduce the revenues that drug companies can collect within the Medicare program,” Robert Moffit, senior research fellow at the Center for Health and Welfare Policy at the Heritage Foundation, previously told the Daily Caller News Foundation. “So, while Medicare beneficiaries will experience lower drug prices and thus lower premiums, private sector employers and employees will see higher drug prices and correlatively higher premiums. Cost shifting, of course, is not cost control.”
The Biden administration also announced a list of ten drugs in August that it would be targeting for Medicare price negotiations. The negotiations are ongoing and will not go into effect until 2026, but if pharmaceutical companies do not cooperate with the federal government, they will be taxed up to 95% on sales as a penalty.
The White House did not immediately respond to the DCNF’s request for comment.
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