Drug companies such as Pfizer, Sanofi, and GlaxoSmithKline plan to hike drug prices in 2021 to deal with profit losses resulting from the coronavirus pandemic, according to a report from Reuters.
More than 300 different drugs are reportedly going to be affected by the price increases.
As a result of the ongoing coronavirus pandemic, Americans have been visiting their doctors less and have therefore been prescribed less drugs, cutting profits. Drug companies have also suffered profit reductions as a result of President Donald Trump's price-slashing regulations. Cutting drug prices was a key promise of Trump's 2016 campaign, and President-Elect Biden has promised that he will pursue other methods of lowering drug prices.
Some drug companies have seen declines in profits as they shifted their R&D expertise to developing the coronavirus vaccine, as is the case for Pfizer. Higher drug prices could help make up for losses.
"This modest increase is necessary to support investments that allow us to continue to discover new medicines and deliver those breakthroughs to the patients who need them," said Pfizer spokeswoman Amy Rose. She further cited vaccine development as one of the reasons for the price increases.
In 2020, most drug companies have kept their annual drug price increases below ten percent, with major companies such as Pfizer and Sanofi generally increasing prices by no more than five percent. GSK, however, has raised the price for two Shingles vaccines by seven percent and 8.6 percent. Teva Pharmaceuticals raised the prices of 15 drugs, with the highest increase being 9.4 percent.
Overall, 860 drugs have risen in price in 2020 with an average price increase of approximately five percent. Drug price increases have become smaller since 2015.
Pfizer says they will be raising the prices of 60 drugs in 2021 between half a percent and five percent, with the higher increases going towards drugs such as Xeljanz, Ibrance, and Inlyta. They also say all drugs got an automatic 1.3% increase to keep up with inflation, as is standard. Sanofi says they will be hiking the prices of vaccines by up to five percent.
Formal announcements on drug price increases are expected to continue in January of 2021.
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