While gasoline and food prices soar, few products rival the inflation in prices on newly launched prescription drugs, according to a new study.
The median launch price of a new drug in the US soared from $2,115 in 2008 to $180,007 in 2021, a 20% annual inflation rate over the period, researchers at Harvard-affiliated Brigham and Women’s Hospital in Boston found. Even after adjusting for factors such as drugmakers’ focus on expensive disease categories like cancer and estimated discounts that manufacturers give some purchasers, the annual inflation rate in launch prices over the period was still almost 11%.
Drug companies regularly introduce new medicines that aim to improve upon the efficacy or tolerability of existing treatments. While public attention has focused on year-to-year price hikes for existing prescription medicines, the study indicates that soaring launch prices also contribute to rising costs.
Over 47% of new drugs introduced in 2020 and 2021 cost more than $150,000 per year, compared to just 9% of new drugs from 2008 to 2013, the researchers found. The study, published in the JAMA medical journal, is based on an analysis of annual list prices of 548 drugs launched between 2008 and 2021 and uses price data from SSR Health research firm. The analysis of discounted prices was based on a smaller subset of 395 drugs.
“The trend in prices for new drugs outpaces growth in prices for other health care services,” the researchers concluded in the study.