New Drugs Hit Market With Hefty Price Tags

These prices pay for discovery of new medicines of whole world. We in Lithuania are using these medicines eventually without paying such big money. On the other hand, these high prices can cause people to resent it, so politicians can change the whole system.

"A new Amgen Inc. lung-cancer treatment, Lumakras, carried a hefty price tag when it came out in 2021: $17,900 per patient monthly.

Just over a year later, in December 2022, a second drug for the same type of cancer, Krazati from Mirati Therapeutics Inc., had an even higher price: $19,750 a month -- a 10% premium.

As drugmakers face rising pressure to rein in repeat or annual price increases on existing drugs, new brand-name medicines are coming to market with ever-higher price tags. Previously, companies would carefully consider whether to crack big price barriers when launching a drug, like $5,000 and then $10,000 a month. Now, many new drugs for cancer and rare diseases routinely exceed those price thresholds, often coming in at more than $20,000 a month.

These higher starting prices for new drugs have contributed to higher out-of-pocket costs for patients and stretched budgets for private insurers and federal programs including Medicare.

The median starting price for a newly approved drug nearly tripled to $7,034 per patient monthly in 2022, from $2,624 in 2011, according to an analysis conducted for The Wall Street Journal by 46brooklyn Research, an Ohio-based nonprofit that analyzes drug price data.

Drugmakers said the prices reflect the clinical benefits the new drugs provide. The companies said most people don't pay list prices because they offer rebates and discounts to employers, pharmacy-benefit managers and insurers. And companies often provide assistance to help defray out-of-pocket costs for patients.

The 46brooklyn analysis focused on the list prices for 485 prescription drugs approved by the Food and Drug Administration since 2011 that had an active ingredient not previously approved by the FDA.

The analysis included some new products, such as the costly gene therapies that are intended to be given once. It didn't include some drugs for which list prices weren't available.

Two new cancer drugs approved in the U.S. in January -- Eli Lilly & Co's Jaypirca for mantle-cell lymphoma and Stemline Therapeutics Inc.'s Orserdu breast-cancer treatment -- each cost at least $21,000 a month, or more than $250,000 for a full year of use.

Some new drugs that are intended to be one-time treatments now carry starting prices in the millions of dollars per patient. CSL Ltd.'s Hemgenix, a gene therapy for the blood disorder hemophilia B, made its debut with a list price of $3.5 million after it was approved by U.S. regulators in November. CSL said the pricing reflects the treatment's benefit to patients, potentially sparing them from repeat dosing of an older, costly drug.

This launch-price inflationary trend for new medicines comes as new legislation is putting pressure on price increases for older drugs.

The U.S. Inflation Reduction Act of 2022 aims to curb drug costs by requiring drugmakers to pay rebates to the federal Medicare program if certain drug-price increases exceed the general inflation rate, and by giving the Medicare agency the authority to negotiate prices for certain drugs several years after they are introduced.

But the new law doesn't directly stop drugmakers from charging a high price for a brand new drug at launch, and drug-price watchdogs said there are few checks on how high the price can go. The new law could contribute to higher launch prices if companies see that as a way to offset limits on their ability to raise prices for a new drug after it is launched.

"It will put pressure on you to launch prices at higher levels to give you increased bandwidth in years further down the line when you are not able to put your foot fully on the gas," said Antonio Ciaccia, chief executive of 46brooklyn.

Among the other factors fueling high launch prices is the drug industry's increased focus on developing new medicines for diseases with small patient populations, like genetic disorders and certain cancers, drug-price researchers said.

Companies have long justified high prices for such "orphan" drugs because there are fewer patients from whom to generate enough sales for a return on costly research-and-development investments. Now, such drugs make up a bigger portion of the industry's output. In 2022, 54% of new drugs approved by the FDA were for rare diseases, versus 33% in 2012, according to the agency.

Unlike some other developed countries, the U.S. doesn't have price controls on starting prices for new drugs.

"There is nothing restricting manufacturers from charging as high a price as the market will bear," said Benjamin Rome, an instructor of medicine at Harvard Medical School who researches drug prices. "And as a result, the manufacturers can continue to charge higher prices, as long as you have new products."

Dr. Rome and colleagues published an analysis in the Journal of the American Medical Association last year finding that 47% of the new drugs approved in 2020 and 2021 had annual list prices of at least $150,000, versus only 9% of drugs approved from 2008 to 2013.

The $21,000-a-month list price for Lilly's new lymphoma drug Jaypirca is higher than the starting price for other, similar drugs, known as BTK inhibitors, that have been approved in the past 10 years.

BeiGene Ltd.'s Brukinsa had a starting price of $12,935 a month when it was approved for mantle-cell lymphoma in 2019. Imbruvica from Johnson & Johnson and AbbVie had a launch price of $10,900 a month when it was approved for mantle-cell lymphoma in 2013. List prices for those drugs have since risen as they have been approved for new uses such as leukemia.

A Lilly spokesman said the company doesn't believe comparing prices between Jaypirca and the older BTK drugs is appropriate because its drug is approved for a different patient population. Jaypirca is the first BTK drug approved to treat relapsed or refractory mantle-cell lymphoma after two lines of prior treatment that includes another BTK drug.

Lilly said it prices its medicines based on the value they bring to patients and the scientific innovation they represent."  [1]

1. New Drugs Hit Market With Hefty Price Tags
Loftus, Peter.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 10 Mar 2023: A.1.