More drugmakers hike U.S. prices as new year begins

By Michael Erman

NEW YORK (Reuters) – Drugmakers including Bristol-Myers Squibb Co, Gilead Sciences Inc, and Biogen Inc hiked U.S. list prices on more than 50 drugs on Wednesday, bringing total New Year’s Day drug price increases to more than 250, according to data analyzed by healthcare research firm 3 Axis Advisors.

Reuters reported on Tuesday that drugmakers including Pfizer Inc, GlaxoSmithKline PLC and Sanofi SA were planning to increase prices on more than 200 drugs in the United States on Jan. 1.

Nearly all of the price increases are below 10% and the median price increase is around 5%, according to 3 Axis.

More early year price increases could still be announced.

Soaring U.S. prescription drug prices are expected to again be a central issue in the presidential election. President Donald Trump, who made bringing them down a core pledge of his 2016 campaign, is running for re-election in 2020.

Many branded drugmakers have pledged to keep their U.S. list price increases below 10% a year, under pressure from politicians and patients.

The United States, which leaves drug pricing to market competition, has higher prices than in other countries where governments directly or indirectly control the costs, making it the world’s most lucrative market for manufacturers.

Drugmakers often negotiate rebates on their list prices in exchange for favorable treatment from healthcare payers. As a result, health insurers and patients rarely pay the full list price of a drug.

Bristol-Myers said in a statement it will not raise list prices on its drugs by more than 6% this year.

The drugmaker raised the price on 10 drugs on Wednesday, including 1.5% price hikes on cancer immunotherapies Opdivo and Yervoy and a 6% increase on its blood thinner Eliquis, all of which bring in billions of dollars in revenue annually.

It also raised the price on Celgene’s flagship multiple myeloma drug, Revlimid, 6%. Bristol acquired rival Celgene in a $74 billion deal last year.

Gilead raised prices on more than 15 drugs including HIV treatments Biktarvy and Truvada less than 5%, according to 3 Axis.

Biogen price increases included a 6% price hike on multiple sclerosis treatment Tecfidera, according to 3 Axis.

Gilead and Biogen could not be immediately reached for comment.

3 Axis advises pharmacy industry groups on identifying inefficiencies in the U.S. drug supply chain and has provided consulting work to hedge fund billionaire John Arnold, a prominent critic of high drug prices.

(Reporting by Michael Erman; Editing by Nick Zieminski)

Eli Lilly backs U.S. proposal on drug rebates to lower costs

The logo and ticker for Eli Lilly and Co. are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 18, 2018. REUTERS/Brendan McDermid

By Tamara Mathias

(Reuters) – Eli Lilly and Co on Wednesday embraced a U.S. government proposal to end a decades-old system of rebates drugmakers make to industry middlemen, saying it could lower the cost of insulin and other prescription drugs for patients.

Lilly, along with other major insulin makers, Sanofi SA and Novo Nordisk, has been under mounting pressure from patients and politicians over the rising cost of the life-sustaining diabetes treatment.

“While it’s still a proposal, we see this as … a win for patients, lowering their out-of-pocket costs at the pharmacy counter with the greatest benefit realized by patients taking more highly-rebated products such as insulin,” Chief Executive David Ricks said on a call with analysts.

Drugmakers argue they have to keep prices high because of the rebates they must pay to pharmacy benefit managers and health insurers to get products on their lists of covered drugs. In January, the administration of U.S. President Donald Trump proposed a rule that would end the rebate system or pass along the savings to patients.

“We’ll adapt to whatever rules come out and how they get finalized,” Ricks said.

Lilly on Wednesday also cut its 2019 profit and revenue forecasts to account for disappearing sales of its cancer drug Lartruvo, which won conditional U.S. approval in 2016 based on early data but last month failed to extend patient survival a confirmatory trial. Costs related to Lilly’s pending $8 billion acquisition of Loxo Oncology also contributed to the revised forecast.

Lilly has said it is suspending promotion of Lartruvo and it will no longer be prescribed to new U.S. patients.

The Indianapolis-based drugmaker’s research and development spending is also expected to rise as it develops Loxo’s pipeline of targeted drugs for cancers driven by rare genetic mutations.

The company said it now expects 2019 adjusted earnings of $5.55 to $5.65 per share, down from its prior forecast of $5.90 to $6.00. It expects revenue of $25.1 billion to $25.6 billion versus its prior view of $25.3 billion to $25.8 billion.

“The forecast cut was generally expected, given the Loxo acquisition and the Lartruvo failure were known events,” Edward Jones analyst Ashtyn Evans said.

“Diabetes will always be an area where we’ll see pricing pressure. Lilly fully takes that into consideration when giving guidance,” she added.

Excluding items, Lilly earned $1.33 per share, a penny shy of analysts’ average estimate, according to IBES data from Refinitiv.

Eli Lilly shares fell 1.3 percent to $118.82.

(Reporting by Manogna Maddipatla, Tamara Mathias in Bengaluru and Julie Steenhuysen in Chicago; Editing by Saumyadeb Chakrabarty and Bill Berkrot)

Drug companies greet 2019 with U.S. price hikes

FILE PHOTO: A person holds pharmaceutical tablets and capsules in this picture illustration taken in Ljubljana September 18, 2013. REUTERS/Srdjan Zivulovic

By Michael Erman

NEW YORK (Reuters) – Drugmakers kicked off 2019 with price increases in the United States on more than 250 prescription drugs, including the world’s top-selling medicine, Humira, although the pace of price hikes was slower than last year.

The industry has been under pressure by the U.S. President Donald Trump to hold their prices level as his administration works on plans aimed at lowering the costs of medications for consumers in the world’s most expensive pharmaceutical market.

During a White House meeting with members of his Cabinet, U.S. President Donald Trump on Wednesday said he expected to see a tremendous decrease in drug prices. Health and Human Services (HHS) Secretary Alex Azar was at the meeting.

The overall number of price increases was down by around a third from last year, when drugmakers raised prices on more than 400 medicines, according to data provided by Rx Savings Solutions, which helps health plans and employers seek lower cost prescription medicines.

Allergan Plc was particularly aggressive. It raised list prices on more than 50 drugs, and more than half of those by 9.5 percent, according to the Rx Savings data

AbbVie Inc increased by 6.2 percent the list price of its blockbuster rheumatoid arthritis treatment Humira, which is on pace to record about $20 billion in sales in 2018.

Allergan said in a statement that its average list price increase across its portfolio is around 3.8 percent this year. It said it does not expect to realize any net benefit from the increases this year because of higher rebates and discounts it expects to make to payers.

AbbVie did not immediately respond to request for comment.

More price increases are expected this month. Reuters reported late last year that nearly 30 drugmakers had notified California agencies they plan to raise list prices of their drugs. Not all of those increases have been announced yet.

The United States, which leaves drug pricing to market competition, has higher prices than in other countries where governments directly or indirectly control the costs, making it the world’s most lucrative market for manufacturers.

HHS has proposed policy changes aimed at lowering drug prices and passing more of the discounts negotiated by health insurers on to patients. Those measures are not expected to provide relief to consumers in the short-term, however, and fall short of giving government health agencies direct authority to negotiate or regulate drug prices.

“It’s business as usual” for drugmakers, said Rx Savings Solutions Chief Executive Michael Rea, who said he believes there has to be meaningful changes to the marketplace, rather than new regulations in order for drug prices to drop.

(Reporting by Michael Erman; additional reporting by Jeff Mason in Washington; Editing by Bill Berkrot)