Harvard, Kesselheim paper highlights almost 90x increase in launch prices for new drugs since 2008
Paul Schloesser
Associate Editor
Aaron Kesselheim
With increasing clamor over rising prices and corresponding inaccessibility of certain drugs, the newest paper out of the Journal of the American Medical Association confirms price increases — and serves as a reminder of a time when the increases weren’t so steep.
The paper, “Trends in Prescription Drug Launch Prices, 2008-2021” was written by Harvard Medical School professors Aaron Kesselheim and Ben Rome, alongside research assistant Alexander Egilman. They found that the mean net price of approved drugs increased by more than 10% every year, and the launch price for new drugs increased exponentially over that same timeframe.
The median net price of drugs increased from $1,376 in 2008 to $159,042 in 2021 — an exponential increase year over year of 10.7%. Median launch prices were higher overall too, going from $2,115 in 2008 to $180,007 in 2021. In 2020-2021, 47% of new drugs were initially priced above $150,000 per year. And for the most costly drugs, look no further than oncology and rare disease, which had a median price between $155,000 and $168,000 respectively.
The op-ed the trio posted in the New York Times on Wednesday reiterated what the authors wrote in the JAMA letter: “Prices for New Drugs Are Rising 20 Percent a Year. Congress Needs to Act.”
Among other things (such as how provisions within the Build Back Better Act, sponsored by Democrats in Congress, would have helped to rein in drug costs), the trio talked about how what used to be known as an acceptable price has grown substantially, from their perspective. For example, the authors talked about type 2 diabetes drugs and how their price quintupled over a decade – starting with the approval of saxagliptin and market entry in 2009, where it cost around $5 a pill. Five years later, Jardiance was introduced at double the price, $10 a pill. And according to the authors, Rybelsus, or semaglutide, started out in 2019 at $25 a pill, an annual cost of $10,000.
Democratic senator Joe Manchin put the pin in the Build Back Better Act late last year, dashing Democratic hopes about drug pricing reforms for the time being.
The three ended their research letter with a simple observation: “In response to the current trends, the US could stop allowing drug manufacturers to freely set prices and follow the example of other industrialized countries that negotiate drug prices at launch.” In the NYT op-ed, the writers noted examples such as Canada, France and Germany, which negotiate the price of newly-approved drugs based on their clinical benefits, compared to already-approved treatments.
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