Drug makers are raising prices by 3.3% in the new year

Pfizer Inc.,

PFE 0.19%

which has a large product portfolio, led the way with the most of the gains, raising prices by 5% or less for more than 200 products. The drug industry normally sets prices for its therapies at the beginning of the year and again in the middle of the year.

In total, about 70 drug manufacturers raised prices in the US on Friday, according to an analysis by Rx Savings Solutions, which sells software to help employers and health plans choose the least expensive drugs. The mean increase of 3.3% included changes at different doses for the same drug according to the analysis. Inflation was 1.2% in the past 12 months.

This year’s average is lower than a year ago, when, according to the analysis, more than 60 companies raised the prices of hundreds of drugs by an average of 5.8%. However, it found that companies were raising prices for at least 50% more products compared to last year.

The largest price increase, 31%, came through Advanz Pharma Corp.

CXRXF -11.80%

and its hypertension product Dutoprol, according to the analysis. The drug is a brand combination of two cheaper generic drugs that have been around for decades. The UK-based company did not immediately respond to requests for comment.

Pfizer is rolling out a Covid-19 vaccine developed with Germany’s BioNTech SE in the US and other countries. A year ago, Pfizer similarly raised the prices of a number of drugs, and was previously criticized by President Trump for the way it has priced its products.

Many of the New York-based company’s products rose in price by 5% or less, according to Rx Savings Solutions analysis. Among them are the breast cancer treatment Ibrance, which sold about $ 4 billion worldwide in the first nine months of last year, plus rheumatoid arthritis therapy Xeljanz and pneumococcal vaccine Prevnar.

A Pfizer spokeswoman said the company’s price increases were in line with inflation and were needed to fund research into new drugs. Most of them involved hospital products and sterile injectables, about a third of which are sold at or below manufacturing costs, Pfizer said.

It said it is targeting growth through extensive use of drugs, not price increases. The company noted that net prices have been stable or declining for the past three years.

The price increases for companies influence so-called list prices set by manufacturers; most patients do not pay these prices, without taking into account discounts, rebates and insurance benefits. Patients without insurance or with a pharmacy deductible can pay the full list price.

Drug makers have said prices are being increased in conjunction with discounts they give pharmacy administrators, or PPE, to gain favorable placement on the lists of covered drugs known as formularies.

In fact, net prices have fallen due to deep discounts on PPE, which secretly negotiate prices with their customers, such as employers and unions.

According to pharmaceutical analysts at SSR Health LLC, net prices fell by 2.3% in the third quarter of 2020 versus a decline of 4.7% in 2019. While list prices have increased on average almost every quarter since 2017, net prices have been dropped, according to data from SSR.

In recent years, pharmaceutical companies have increasingly cited the net price phenomenon, saying they don’t really benefit much from list price increases and their net prices suffer as they pay greater discounts to pharmacy operators.

In recent years, the pharmaceutical industry has faced increasing scrutiny from patients, legislators and health plans over the prices of its products. Some firms responded with pledges not to raise list prices above certain levels, including below inflation; but they are also trying new and creative ways to get paid for their most expensive drugs.

The Trump administration’s attempts to lower drug prices have been largely thwarted by industry lawsuits, including an attempt to link the prices of certain prescription drugs in the US to their prices in other developed countries. Still, the government finalized a rule in November to curb discounts to Medicare middlemen.

President-elect Joe Biden’s government is also expected to try to reduce the cost of prescription drugs, and Mr. Biden has called for a price restriction on newly launched drugs. Most of his proposals are based on the Democratic playbook for curbing drug prices, including one that would set up an independent governmental board to set the prices paid by most government purchasing programs, including Medicare.

“Millions of consumers in this country urgently need information to make informed decisions about what their therapy and pharmacy options are and to avoid pitfalls,” said Michael Rea, CEO of Rx Savings Solutions. Clients of the Overland Park, Kan., Company include Target Corp. and Toyota Motor Corp.

Most of the product prices from his firm’s analysis were up less than 10%.

Teva Pharmaceutical Industries Ltd.

TEVA 0.52%

, a large generics company, raised the prices of a dozen products, including some painkillers, according to the analysis. According to the analysis, it also increased the price of its migraine drug Ajovy by 5%.

A spokeswoman for Teva said the Israel-based company is setting prices to give patients access to its products, while remaining committed to product research and shareholders.

According to the analysis, Glaxo in the UK increased prices of the shingles vaccine Shingrix and the meningitis vaccine Bexsero each by 7%.

A Glaxo spokeswoman confirmed the increases, saying the average increase in the company’s total product portfolio was 2.6%. She also said the company has made fewer price increases than last year and has not increased the price of 18 products.

According to the analysis, France’s Sanofi increased the price of more than a dozen products by 5% or less. A company spokeswoman said the increases are less than the country’s overall health care spending growth, and the company is pricing its products responsibly.

Bausch Health BHC 3.69%

Cos., Which announced in the summer to split off its eye care business, increased the prices of about 40 products, according to the analysis. The drugs affected include the gastric drug Xifaxan and the antidepressant Wellbutrin, both of which are up in price by 8%.

The company did not immediately respond to a request for comment.

Write to Jared S. Hopkins at [email protected]