The annual launch price of novel treatments approved from 2022 to 2024 continued to rise significantly in the U.S., exceeding the rate of inflation and GDP growth, a new report from the drug pricing watchdog, the Institute for Clinical and Economic Review (ICER), indicated on Thursday.
Based on an analysis of 154 novel treatments approved by the FDA, the nonprofit announced that the inflation-adjusted median annual launch price of drugs climbed by 51% from 2022 to 2024 based on net prices, which account for rebates and discounts.
As for the publicly available list price, also known as the Wholesale Acquisition Cost, which is set by manufacturers, the ICER said that drug launch prices increased 24% during the same period.
Gene or cell therapies, orphan treatments, and drugs targeting specific therapeutic areas such as oncology drugs were among products characterized by significantly higher launch prices, according to the report.
Even after considering the mix of different drug classes approved every year, ICER said that the annual net launch price has increased by 33% per year from 2022 to 2024.
“Launch prices are going up, patient access is going down, and in many cases, we are overpaying for treatments,” said ICER’s President and CEO, Sarah Emond.
A separate analysis of 23 drugs indicated that aligning their launch prices with ICER’s Health Benefit Price Benchmark (HBPB), which suggests a fair price based on health benefits, could have generated roughly $1.3B – $1.5B in savings in the first year alone after the approvals.
The analysis further showed that 16 medications exceeded HBPB ranges in terms of annual net prices, causing an estimated $1.92B in spending during the first year post-approval compared to $431M – $661M spending based on HBPB ranges.
Drugs approved in 2022, including Bristol Myers’ (NYSE:BMY) Camzyos, TG Therapeutics’ (TGTX) Briumvi, and Carvykti, a cell therapy marketed by J&J (NYSE:JNJ) and Legend Biotech (LGND), were part of that group.
FDA’s 2022 approvals, such as Biogen (BIIB) and Eisai’s (OTCPK:ESALF) Leqembi and Casgevy, a gene therapy marketed by Vertex Pharma (NASDAQ:VRTX)/CRISPR (CRSP), as well as its 2023 approvals, including Merck’s (NYSE:MRK) Winrevair and BridgeBio Pharma’s (BBIO) Attruby, are also included in the group.