In 2023, Prices of New Drugs in the United States Increased by 35%


In the previous year, pharmaceutical companies introduced new drugs in the United States at prices that were 35% higher than those in 2022. This trend is attributed, in part, to the industry’s focus on costly therapies for rare diseases such as muscular dystrophy, as revealed by a Reuters analysis.

According to the analysis of 47 medicines, the median annual list price for a new drug in 2023 was $300,000, up from $222,000 the previous year. A study published in JAMA reported a median annual price of $180,000 for the 30 drugs first marketed through mid-July in 2021.

Notably, over half of the new products approved by the Food and Drug Administration in 2023 and 2022 targeted orphan diseases, affecting fewer than 200,000 Americans. Some of these drugs are not expected to achieve significant sales. The orphan disease rate is slightly higher than the 49% observed in the previous five years.

While a high price can be justified for a drug that provides substantial value to patients, concerns arise as prices continue to escalate without a clear rationale, as pointed out by Dan Ollendorf, Chief Scientific Officer at the Institute for Clinical and Economic Review (ICER), an influential group evaluating the value and prices of medicines.

He pointed out that the pricing of numerous rare disease and cancer drugs does not align with their therapeutic benefits. However, due to a lack of alternatives, manufacturers wield significant negotiating leverage.

According to Reuters’ analysis, 55 novel drugs received approval from the FDA last year, an increase from 37 in 2022. The agency’s biologic division sanctioned 17 new products, including four gene therapies.

The analysis specifically excludes vaccines and drugs used intermittently, such as Pfizer’s COVID-19 antiviral Paxlovid. Additionally, drugs not yet launched commercially are not considered.

Among the 47 medications scrutinized, the highest annual price for drugs intended for consistent use was $1.8 million for Regeneron’s Veopoz, a treatment for CHAPLE disease—an inherited condition diagnosed in fewer than 100 people worldwide, characterized by parts of the immune system becoming overactive.

Conversely, the lowest annual price was $576 for the diabetes drug Brenzavvy, marketed by TheracosBio in collaboration with Mark Cuban’s Cost Plus Drugs online pharmacy.

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