A New Year often rings in higher drug prices, and many top drugmakers marked the occasion in just that way this year. List price increases hit dozens of drugs, including staple drugs and blockbuster hopefuls.
None of the increases, however, topped the 10% price-hike cap that's been trendy in pharma since 2016.
In specialty pharma, Allergan, Teva, Collectis, Insys, Synergy and Supernus all raised prices effective Jan. 1, according to Jefferies analysts.
Allergan changed its stickers on 18 medications—all by 9.5%—including key drugs Namenda XR, which treats Alzheimer's disease; Linzess, which targets irritable bowel syndrome for patients with constipation and chronic idiopathic constipation; and Bystolic, a high blood pressure drug.
For its part, Teva hiked prices on seven drugs, with increases ranging from 2.3% to 9.4%. Those hikes come during a turbulent time as it works to cut costs and lay off thousands of employees—and when it needs all the revenue it can get. The hikes were focused on its branded drugs, including respiratory therapy ProAirRespiclick and Parkinson's therapy Azilect.
Horizon Pharma, which has come under fire for past hikes, kept to the single-digit arena with four price increases, all amounting to 9.9%, introduced on Dec. 29.
As the companies raised prices for more than 30 drugs to ring in the New Year—but not a single one by more than 9.9%—it's clear they're sticking by Allergan CEO Brent Saunders' "social contract" pricing pledge, introduced back in 2016. During an intense pricing firestorm that year, Saunders said the industry should police itself on pricing or risk regulatory reform.
He said his company would limit price hikes to once a year and by single digits, a commitment many fellow drugmakers have followed—and others have adhered to it in a de facto fashion.
On Tuesday, an Allergan spokesperson told FiercePharma the "price increases are consistent with Allergan’s Social Contract with Patients—the average list price increase is consistent with our single-digit commitment, and this will be the only price increase taken on these brands in 2018, again, consistent with our commitment."
"Discounts to commercial PBMs, health plans, patients and government payers are expected to bring the net realized price increase down to the low single digits (~2-3%)," he added.
Of course, not all drugmakers have chosen to live by the Saunders rule. Celgene recently raised prices on key drugs Revlimid and Pomalyst, with hikes of 19.8% and 17.7% last year, respectively. Between two sets of increases rolled out in January and June last year, Pfizer raised Viagra's list price by 27.5%, according to a Financial Times report in June.
For many years, drug pricing has been a contentious topic for the pharmaceutical sector. Despite public frustration and strong rhetoric in Congress, however, no proposals on the issue have gained steam in Washington, D.C. In response, many states have taken the issue into their own hands, passing legislation focusing on different segments of the drug business.
So far, analysts figure not much federal action will come in 2018, and drugmakers may feel more free to roll out higher prices. And even if this January round didn't top 10%, it's unclear whether these same drugs will see another round before 2019 rolls around.
Editor's note: This story has been updated with a statement from Allergan.