Analysis: Prices for new US drugs rose 35% in 2023, more than the previous year

Crispr Therapeutics AG

23/02/2024 11:00

By Deena Beasley
       Feb 23 (Reuters) - Pharmaceutical companies last year
launched new U.S. drugs at prices 35% higher than in 2022,
reflecting in part the industry's embrace of expensive therapies
for rare diseases like muscular dystrophy, a Reuters analysis
found.
    The median annual list price for a new drug was $300,000 in
2023, according to the Reuters analysis of 47 medicines, up from
$222,000 a year earlier. In 2021, the median annual price was
$180,000 for the 30 drugs first marketed through mid-July,
according to a study published in JAMA.
    More than half of the new products approved by the Food and
Drug Administration in 2023 and 2022 were for orphan diseases,
meaning they affect fewer than 200,000 Americans, and some are
not expected to become big sellers. The orphan rate is slightly
higher than the 49% seen in the previous five years.
    A high price is justified for a drug with a lot of value to
patients, but "prices are just going up and up without any clear
rationale as to why," said Dan Ollendorf, chief scientific
officer at the Institute for Clinical and Economic Review
(ICER), an influential group that evaluates the value and prices
of medicines.
    He said many rare disease and cancer drugs are not being
priced relative to their benefit, but the lack of alternatives
gives manufacturers negotiating leverage.
    Reuters analyzed 55 novel drugs approved by the FDA last
year, up from 37 in 2022. The agency's biologic division
approved 17 new products, including four gene therapies.
    The analysis excludes vaccines and drugs used intermittently
such as Pfizer's  PFE.N  COVID-19 antiviral Paxlovid. It also
excludes drugs that have not yet launched commercially.
    Of the 47 medications included in the analysis, the highest
price for drugs taken consistently was $1.8 million a year for
Regeneron's  REGN.O  Veopoz for CHAPLE disease, an inherited
condition diagnosed in fewer than 100 people worldwide in which
parts of the immune system become overactive.
    The lowest annual price was $576 for diabetes drug
Brenzavvy, sold by TheracosBio in partnership with Mark Cuban's
Cost Plus Drugs online pharmacy. 
    ICER's Ollendorf said it is too early to tell whether
TheracosBio will succeed with its strategy to "blow up" the
typical drug contracting model by selling a medication in a
widely-used class at a much lower price than the competition.
    TheracosBio CEO Brian Connelly said Brenzavvy "sales are
increasing at a great clip," but declined to provide details.
    
    
    MARKET INCENTIVES     
    Gene therapies, which are one-time treatments, range in
price from $2.2 million for sickle cell disease treatment
Casgevy from Vertex  VRTX.O  and CRISPR  CRSP.BN , to $3.2
million for Sarepta's  SRPT.O  muscular dystrophy therapy
Elevydis.
    The U.S. gives drug manufacturers market exclusivity, fee
waivers, direct funding for research and development, and tax
credits for such orphan treatments.
    "We created a lot of incentives for innovation for rare
diseases and the market responded," said Dana Goldman, director
of the USC Schaeffer Center for Health Policy & Economics.  
"The hope is that eventually we will see some therapeutic
competition in this space and bring prices down."
    The 2022 Inflation Reduction Act limits how much drugmakers
can raise prices for treatments offered under Medicare, the
federal health plan for people age 65 and over. The legislation
does not limit what can be charged for new medicines.
    "It means you are encouraging companies to launch at high
prices," Goldman said.
    Drugmakers stress they do not determine what U.S. patients
end up paying. Many offer savings cards and other programs to
reduce out-of-pocket costs, while health insurers can receive
discounts and rebates from manufacturer list prices, especially
if competing treatments are available.
    Drugmakers also say new medicines offer cost-saving value,
including the possibility of fewer emergency room visits and
hospital stays.
    Boston Consulting Group forecast that 24% of 2023's new
drugs will reach blockbuster status - annual sales of over $1
billion - versus 35% from 2022's crop. 
    As patents expire, lower-cost generics mitigate prescription
drug price inflation, which in the 12 months through December
was roughly in line with broader inflation at 3.3%, according to
U.S. government data.  
    

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U.S. 20 highest-priced drugs launched in 2023    https://reut.rs/4bJ9uZv
U.S. 20 lowest-priced drugs launched in 2023    https://reut.rs/3wtc0mH
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 (Reporting By Deena Beasley
Editing by Bill Berkrot)
 ((deena.beasley@thomsonreuters.com; 213 955 6746; Reuters
Messaging: deena.beasley.thomsonreuters.com@reuters.net))