Wednesday, May 6, 2015

Price increases? Really?

Aha, so I found another dirty little secret of the pharma industry. When sales volume goes down, they raise prices to make up the difference.

"The 9.9% hike in Enbrel's list price pushed through by Amgen on May 1 illustrates once more how biotech and drug companies profit by raising the cost of their older medicines to offset falling prescription volume. Enbrel doesn't work any better for rheumatoid arthritis patients today than the drug did when first approved in 1989 -- but its does cost a lot more.

The same Enbrel with a list price of $10,000 per year in 1989 now costs almost $42,000 per year. Inflation only accounts for about one-third of Enbrel's price increase.

Amgen relies on regular price hikes to maintain sales growth of its older drugs, which are being used by fewer patients. ...Enbrel sales grew 13% to just over $1.1 billion in the first quarter, but only because Amgen raised the price of the drug 19% to offset a 2% drop in prescription volume.
The most recent uptick in Enbrel's list price follows two similar price increases last November (7.9%) and June (6.9%).... 

Abbvie also raised the price of Humira, a competing rheumatoid arthritis drug, by 9.9% on April 1. (And Amgen's hike matched that exactly one month later. Interesting.) Humira's patents in the U.S. and Europe expire in 2016 and 2018, respectively, paving the way for the approval and commercial launch of cheaper "biosimilar" versions.

The roll-out of less expensive but equally effective treatments for rheumatoid arthritis patients is likely to put a dent in revenue generated by Amgen and Abbvie. But until that day of reckoning comes, the prices of Enbrel and Humira will surely march higher."

How sneaky. I should try that. As I cut back my work hours because of my health, I should demand more per hour to compensate. I am sure my boss would like that. Not!
A shell filled beach on Sanibel, near our condo.

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