This January, pharma companies have announced plans to increase the prices of more than 250 branded drugs in the US, according to data from healthcare research firm 3 Axis Advisors, as reported by Reuters.
The data reports that nearly all drug price increases are below 10% and the median price increase of the drugs in January this year is 4.5%. This median price increase was then compared to data available in GlobalData’s Price Intelligence (POLI), which shows a similar trend with an average price increase of 4.0% in January 2025 so far compared to December 2024 across 445 branded medicines that underwent a price change.
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Pfizer has reportedly raised the prices of most of its drugs this month, with more than 60 drugs named, including Paxlovid (nirmatrelvir + ritonavir), Nurtec (rimegepant), Adcetris (brentuximab vedotin), Ibrance (palbociclib), and Xeljanz (tofacitinib). Pfizer has justified these price hikes by stating that they support its investments in drug development costs, and has noted that the price increases for all of its medicines are below the rate of inflation.
The highest price hikes were for Leadiant Pharmaceuticals’ Matulane (procarbazine hydrochloride) and Cystaran (cysteamine ophthalmic solution), with price increases of 15% and 20%, respectively. While some companies increased prices, others cut the list prices. For example, MSD cut the list price of its popular diabetes drugs, Januvia (sitagliptin) and Janumet (sitagliptin + metformin), by 42% “to align the list price more closely to the net price”, according to the Reuters article.
The price changes in the data analysis relate to list prices and do not include confidential rebates to pharmacy benefit managers (PBMs) and other discounts. January is historically the biggest month for pharma companies to raise prices, and more drug price changes will likely occur over the month. The median price increase is in line with the median in previous years. Reuters reports that the median price increase of all branded drugs was also 4.5% in 2024, with the median drug price increases staying around 5% since 2019. A comparison with the data available in GlobalData’s Price Intelligence (POLI) database for the US suggests the presence of a similar trend for the same timeframe. The figure below indicates the median price increase across all branded medicines in the US that underwent a price increase. The yearly median tends to stay at around 5%.
An analysis comparing price trends in GlobalData’s POLI against drugs mentioned in the report from the Reuters article for Pfizer’s Paxlovid, Leadiant Pharmaceuticals’ Cystaran, Bristol Myers Squibb's Breyanzi (lisocabtagene maraleucel), and MSD’s Januvia indicates similar changes year-on-year to the 2025 changes in list prices as reported in the article.
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By GlobalDataPotential for more changes to drug prices in the future
Drug prices are typically highest in the US, and price hikes are expected at this time of the year to contend with high inflation and manufacturing costs. Additional price hikes are also rolled out on 1 July each year. However, the price increases in recent years have been below the industry standard of 10%, indicating that companies have been taking a cautious approach to drug prices and steering away from the large price hikes seen previously. Criticism from the public and lawmakers in Congress in the last decade has made pharma companies rethink their pricing strategies. Now, drug companies are likely launching drugs at high prices to maintain revenue and stay competitive in the market, without relying on raising prices high year-on-year. The Reuters article showed that pharma companies launched new US drugs at prices 35% higher in 2023 compared to those launched in 2022. This trend is expected to continue in the future.
Over the years, pharma companies have faced penalties for significantly raising drug prices. The most recent example of one of these penalties is seen in the Inflation Reduction Act’s (IRA) Medicare drug inflation rebate program, where pharma companies will have to pay a rebate for raising the price of drugs higher than the rate of inflation and aim to ultimately discourage the companies from this practice. The IRA has also sought to address drug prices in other ways, including by allowing the US Government to negotiate the price of drugs in Medicare for the first time and capping out-of-pocket drug costs at $2,000 for Medicare beneficiaries. US President-elect Donald Trump has also vowed to lower drug costs in the US. While it is not yet known how Trump will accomplish this goal, he will likely focus on PBMs and reforming its business practices.
This article is produced as part of GlobalData’s Price Intelligence (POLI) service, the world’s leading resource for global pharmaceutical pricing, HTA and market access intelligence integrated with the broader epidemiology, disease, clinical trials and manufacturing expertise of GlobalData’s Pharmaceutical Intelligence Center. Our unparalleled team of in-house experts monitor P&R policy developments, outcomes and data analytics around the world every day to give our clients the edge by providing critical early warning signals and insights. For a demo or further information, please contact us here.
