U.S. new drug price exceeds $200,000 median in 2022

[January 05, 2023]  By Deena Beasley

(Reuters) - After setting record-high U.S. prices in the first half of 2022, drugmakers continued to launch medicines at high prices in the second half, a Reuters analysis has found, highlighting their power despite new legislation to lower costs for older prescription products.

The median annual price of the 17 novel drugs the U.S. Food and Drug Administration (FDA) approved since July 2022 is $193,900, down from $257,000 in the first half of 2022, Reuters found. For full year 2022, the median was $222,003.

In 2021, the median annual price was $180,000 for the 30 drugs first marketed through mid-July, according to a study published recently in JAMA.

The latest numbers imply double digit year-over-year price growth.

"I don't see anything changing that trend," Dr. Aaron Kesselheim, professor of medicine at Harvard Medical School and Brigham and Women’s Hospital, told Reuters. Kesselheim, who co-authored the JAMA study, believes Congress will eventually have to address excessively high launch prices.
 

The Reuters analysis includes three costly one-time gene therapies the FDA approved in the second half of 2022. Hemgenix, CSL Ltd's $3.5 million gene therapy for hemophilia B was approved in November, making it the most expensive drug in history.

The analysis excludes drugs used intermittently or for cosmetic purposes, as well as imaging agents, products that have not yet been launched commercially and drugs intended for use as part of a bundled reimbursement in a hospital setting.

Illustration photo shows various medicine pills in their original packaging in Brussels, Belgium August 9, 2019. REUTERS/Yves Herman/Illustration

The findings follow a recent analysis from U.S. Democratic Representative Katie Porter which found that the annual price of a newly-launched cancer drug in the United States averaged $283,000 in 2021, a 53% increase from 2017.

The pharmaceutical industry says new drugs, many of which treat rare diseases, offer value, including the possibility of fewer emergency room visits and hospital stays.

Drugmakers also stress that they do not determine what U.S. patients end up paying for the medicines. Many offer savings cards and other programs to reduce out-of-pocket costs.

Health insurers and other payers often demand discounts and rebates for prescription drugs once competing treatments become available. As patents expire, lower-cost generics also mitigate prescription drug price inflation, which in the 12 months through November 2022 was 1.9%, according to the Bureau of Labor Statistics.

Congress last year passed the landmark Inflation Reduction Act that includes a cap on annual drug price increases and allows the Medicare health program for seniors to negotiate prices for up to 20 of the drugs on which it spends the most. The legislation, however, does not limit what drugmakers can charge for new medications.

(Reporting By Deena Beasley; Editing by Caroline Humer and Josie Kao)

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