Despite 35 price hikes, Sanofi’s net prices fell yet again in 2018

Sanofi
Sanofi paid out more than $11 billion in rebates last year, the company said Thursday. (Sanofi)

As drug pricing continues to command attention daily in Washington, D.C., and elsewhere, Sanofi unveiled Thursday morning that it hiked list prices on nearly half its prescription products last year—but that net prices sunk.

The company raised list prices on 35 of 76 prescription medicines by an average of 4.6%, Sanofi reported. But despite those list price increases, net prices fell an average of 8% last year. In all, the company paid out 55% of gross sales in the form of rebates, including $4.5 billion in mandated rebates to government payers and $7.3 billion in “discretionary rebates.” 

RELATED: Sanofi tweaks pricing policies, discloses 8.4% net price decline in 2017 

Free Webinar

Striving for Zero in Quality & Manufacturing

Pharmaceutical and medical device manufacturers strive towards a culture of zero – zero hazards, zero defects, and zero waste. This webinar will discuss the role that content management plays in pharmaceutical manufacturing to help companies reach the goal of zero in Quality and Manufacturing.

In 2017, Sanofi raised list prices an average of 1.6%, but net prices fell 8.4%, the company said.

The latest figures show a growing gap between list and net prices that pharma companies have worked to highlight amid a national debate over drug prices and rebates. Recently, the Trump administration unveiled a plan to take on rebates by scrapping rules that exempt them from federal kickbacks laws. The “safe harbor” protections would instead apply to discounts for patients, and PBMs could charge fees for their services rather than keeping a percentage of rebates. 

Quickly after the proposal, the pharmacy benefit managers hit back; pharma companies have so far supported the move. 

RELATED: Pharma CEOs enthuse about Trump's plan to shake up drug rebates 

Sanofi in 2017 joined a host of pharma companies making pricing pledges amid scrutiny. For its part, the company pledged to limit its price hikes to the National Health Expenditure growth rate established every February by the Centers for Medicare and Medicaid Services. Last year, it updated its policy to provide a rationale when it raises drug prices above the NHE metric and said it'll implement new pricing standards each April.

As the Trump administration and lawmakers weigh ideas to combat drug prices, some drug companies have taken matters into their own hands for competitive classes that feature big rebates. Amgen in October lowered PCSK9 drug Repatha’s list price by 60% in a bid to bolster access. Sanofi recently followed with Praluent in certain cases. And Gilead Sciences, forced to pay out big rebates in hep C, has moved to launch authorized generics to its own big-selling Epclusa and Harvoni.

The Trump administration’s rebate proposal is just one of many ideas that have been floated amid a yearslong discussion over high drug prices. Next week, several pharma CEOs plan to head to Congress to testify on the issue.

Suggested Articles

The cleaning procedures are so poor at a Zydus Cadila plant in India that the FDA says a sampling found 10 different cross-contaminated products.

Oklahoma politicians contend J&J should be on the line for future abatement costs even after a $572 million verdict, but J&J sees things differently.

Abbott helmsman Miles White, who oversaw the spinoffs of AbbVie and Hospira, will step down as CEO after 21 years at the top job.