On Many Drugs Drugmakers Raise 2018 U.S. Prices

Drugmakers opened the new year by raising U.S. costs on many drugs, however, early information demonstrated the increases, for the most part, remained within a 10 percent self-imposed limit in response to a backlash from consumers and politicians.

Soaring off U.S. costs for both branded and generic drugs have started open outrage and government investigations over the recent years.

“Drug cost increases are somewhat more constrained in 2017 and 2018 than they have been already,” Cowen and Co analyst Eric Schmidt said. Allergan Inc (AGN.N) raised costs on 18 different medications, including dry eye treatment Restasis and irritable bowel syndrome drug Linzess, by 9.5 percent, as per a research note released by Jefferies.

Jefferies referred to information collected by Medi-Span Price Rx and refers to list cost increases, before potentially significant discounts and rebates that drugmakers provide to win preferred coverage by insurers. Medi-Span did not react to requests to confirm the information.

Allergan’s CEO, Brent Saunders, in late 2016 pledged to keep cost increases below 10 percent as a major part of what he called the company’s “Social Contract with Patients.”

In 2018, on those brands the raise will be the only ones taken, adding that discounts to various payers should bring the actual increases to customers down to the low single digits, said Allergan spokesman Mark Marmur.

Other drugmakers raising costs include Amgen Inc (AMGN.O), Teva Pharmaceutical Industries Inc (TEVA.TA) (TEVA.N) and Horizon Pharma (HZNP.O), as indicated by Jefferies and Cowen.

Amgen raised the cost of its blockbuster rheumatoid arthritis and psoriasis drug Enbrel by 9.7 percent and Teva increased costs on its ProAir HFA and ProAir RespiClick asthma inhalers by 6 and 3 percent, respectively.

Drug price increases are coming under more scrutiny from states. California Governor Jerry Brown in October signed legislation requiring drug manufacturers to give a 60-day notice if costs are raised more than 16 percent over a two-year time span.

Shares of Allergan rose 4.1 percent, while Teva and Horizon Pharma shares were up 0.8 percent and 2.9 percent, respectively.


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