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Pfizer bucks the trend with as high as 98.5% price cuts.
Many major drug manufacturers raised list prices on medications on New Year’s Day, according to a new report.
At the same time, Pfizer slashed prices-by as much as 98.5%-on many of its older medications.
Bristol-Myers Squibb, Gilead Sciences, Biogen, Pfizer, GlaxoSmithKline, and others hiked prices on more than 400 drugs, according to healthcare research firm 3 Axis Advisors.
The average price increase is around 5.2%, and most of the prices increases were below 10%, 3 Axis found.
“Overall, I think drug makers have moderated their approach to price increases over the last few years. Our research has shown that launch prices are what have been growing while the de-emphasizing of increases on pre-existing drugs has occurred,” 3 Axis Advisors Co-founder Antonio Ciaccia told FormularyWatch.
In addition, more price increases are being used to increase drug maker rebates and discounts back to insurers, PBMs, and government payers “as a means to entice formulary placement and favorable drug coverage,” Ciaccia said. “The gap between the list prices and the actual net prices-post-discounts-has been growing significantly in recent years. What that means is that while the sticker prices on many of these drugs is going up, it may not necessarily translate into increased profits for drug makers.”
Medications with the largest price hikes include: methylphenidate (Cotempla XR, Neos Therapeutics), +13.2%; methamphetamine hydrochloric (Desoxyn, Ovation Pharmaceuticals), +10%; tapentadol (Nucynta, Collegium), +9.9%; meperidine (Demerol, Pfizer), +9.4%; omeprazole (Prilosec Oral Packet, Procter & Gamble, AstraZeneca), +9; hydrocodone bitartrate (Zohydro ER, Zogenix), +8%; pneumococcal 13-valent conjugate vaccine (Prevnar 13, Pfizer), +7.3%, and sacubitril/valsartan (Entresto, Novartis) +7%.
However, Pfizer slashed prices on around 36 drugs, according to 3 Axis.
“I’ve never seen this type of price slashing before…they’re massive,” Ciaccia said.
Pfizer’s “massive” price cuts include: clindamycin (Cleocin), -98.5%; linezolid (Zyvox), -97.7%, fluconazole (Diflucan), -97%, voriconizole (Vfend), -97%; and azithromycin (Zithromax), -95.7%.
While he doesn’t know the exact reason for Pfizer’s cuts, Ciaccia guesses that the pharma maker sees “an ability to be competitive in a multi-source marketplace by lowering their list prices…It is a significant philosophical shift that we found pretty noteworthy.”
Read more: Experts debate drug pricing policies