Pfizer, GSK, AbbVie and many more celebrate New Year with price hikes: report

As many in the U.S. struggle with rising costs of living, large pharmaceutical companies have opted to ring in the New Year with price hikes.

Drugmakers such as Pfizer, GSK, Bristol Myers Squibb, AstraZeneca and Sanofi are introducing higher prices for more than 350 branded drugs in early January, Reuters first reported, citing data and analysis from research outfit 3 Axis Advisors and the related drug pricing non-profit 46brooklyn.

Already, list prices on big-selling products such as AbbVie's Imbruvica, AstraZeneca's Tagrisso, Gilead Sciences' Biktarvy, GSK's Shingrix and Pfizer's Ibrance have gone up to start the year, a database from 46brooklyn shows.

The first tranche of 2023 price increases comes as the specter of drug cost reform, via Democrats’ Inflation Reduction Act (IRA), looms in the not-so-distant future. The law, which passed in August, is set to give Medicare the power the negotiate certain drug costs starting in 2026. The law also aims to limit price hikes to the rate of inflation, which has been historically elevated over the last year. 

At the same time, even large pharmaceutical companies are being forced to contend with inflation and supply chain squeezes that have led to a bump in manufacturing expenses, Reuters points out. Still, it remains to be seen how the industry's overall profitability in 2022 will compare with prior years.

These price hikes likely won't surprise industry watchers. Drugmakers routinely use the first day of the year, and sometimes July 1, to raise their list prices.

So far, the median percentage increase on the wholesale acquisition cost (WAC) of brand name drugs whose prices have risen in 2023 clocks in at 5%, according to 46brooklyn. That’s about on par with the 4.9% median WAC increase the industry saw in 2022, according to the non-profit’s research.

All told, drugmakers hiked the prices on more than 1,400 drugs last year, marking the greatest number of price increases since 2015, 46brooklyn notes.