Branded drug prices leapt almost 15% last year, led by pain pills, COPD and heart meds

Print 30 January 2015
Carly Helfand, FiercePharma

It's no secret that branded drugmakers often rely on price hikes to keep U.S. sales growth coming, especially on older meds whose patents are close to the ends of their lives. But according to new data, prices spiked more than 10% last year--a trend that may fuel the payer backlash that's been steadily mounting.

U.S. consumers saw prescription med prices vault 10.9% in 2014, according to the Truveris National Drug Index. Branded drug prices soared the most, climbing by 14.8%. But specialty drugs contributed their fair share to the leap, rising by 9.7%, and even generics chipped in with a 4.9% price jump.

"Drug costs across all categories are becoming an escalating concern for patients, employers, insurers and lawmakers," Truveris CEO Bryan Birch said in a statement. "Looking at macro industry trends, including consolidation, regulation and formulary pressures, we expect this price inflation to continue to put pressure on American households and employers in 2015."

Some therapeutic areas were more responsible than others for the pricing escalation. Across branded, generic and specialty drugs, muscle pain and stiffness therapies took the cake with a 29.8% increase; inflammation, COPD and heart disease treatments followed behind them, with each of those categories passing the 19% mark.

It's a trend drugmakers can't necessarily get away with overseas, where drug price watchdogs frequently force companies to negotiate a deal to get their products covered. But U.S. payers have begun striking back against sky-high med prices in some of these therapeutic fields.

Take COPD, for example: GlaxoSmithKline ($GSK) and respiratory rival AstraZeneca ($AZN) have been duking it out as they vie for the favor of major PBMs, negotiating discounts to make their way onto national formularies in place of their rivals. But while aging behemoth Advair is back on Express Scripts' ($ESRX) good side after last year's exclusion, the PBM left GSK newcomer Breo--meant to fill in for some of Advair's lost sales--off the list for the second straight year in 2015.

And as the hep C pricing war between Gilead ($GILD) and AbbVie ($ABBV) has shown, payers are prepared to get even more involved. After the two companies rolled out ultra-pricey next-gen treatments for the disease, a score of payers have jumped in to ink exclusive coverage deals.

The pricing war won't end with hep C, either. As Express Scripts CEO George Paz said at this month's JP Morgan Healthcare Conference, playing hardball on forthcoming PCSK9 meds "is the short-term, and cancer is the long-term."

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