Big Pharma Is Raising Prices This Month

Americans are set to see some major price hikes on their everyday medications in 2024.

Roughly 500 drugs will increase in cost, according to healthcare research firm 3 Axis Advisors. That includes 140 different brands of drugs and their different doses, the company's data showed.

The price increase arrives as President Joe Biden plans to unveil 10 historically pricy drugs at reduced rates later on in the year. His administration's Inflation Reduction Act allows Medicare to negotiate lower prices, beginning in 2026.

Only a few companies have indicated prices would come down for select medications.

GlaxoSmithKline is reducing its rates on some asthma, herpes and anti-epileptic drugs in January. and Eli Lilly is also looking to reduce its Humalog and Humulin insulins by more than 70 percent. Popular diabetes and anti-obesity drug Mounjaro will also see a price decline of 4.5 percent on January 1.

Last year, various companies cut prices for insulin to avoid penalties under the 2021 American Rescue Plan Act, but big pharma companies tend to jolt prices up in the new year to keep in line with inflationary pressures.

"Every major former blockbuster insulin is going to get thrown under the tires of this policy," 3 Axis president Antonio Ciaccia told Reuters.

Pfizer will have the most price increases this month, with more than a quarter of all increases for January, the report found.

After Pfizer, Baxalta will be raising prices the most, with 53 drugs affected. Sanofi is also increasing prices by 9 percent on drugs for people with typhoid fever, as well as rabies and yellow fever vaccines.

Overall, drugmakers have tried to keep their price hikes at 10 percent or lower after widespread criticism over big pharma cost increases in recent years.

Newsweek reached out to the drugmakers by email for comment.

January tends to be a time for drug price hikes. In 2023, pharmaceutical companies raised the price tag of more than 1,420 medications.

Traditionally, established drugs don't increase as much as newer, in-demand medications.

Widespread Inflation

Inflation in 2024 isn't specific to big pharma. Nearly all industries, from restaurants to retail, are hiking prices for consumers as overall inflation stood at 3.1 percent across all goods and services.

"There's been a significant rise in labor costs due to a more competitive job market and increased minimum wages in many areas," Aaron Anderson, the CEO and founder of franchise consulting firm Axxeum Partners, told Newsweek.

While for restaurant and retail companies, customers generally have the choice to reduce the frequency of their purchases or spend less money on costly goods, medication puts a special strain on American consumers as many cannot live without the lifesaving drugs and must pay a high premium for them.

Reflecting the current economic pressures Americans are up against, the Social Security Administration boosted benefit payments by 3.2 percent as part of its annual cost-of-living adjustment, but there are concerns they won't be sufficient to cover healthcare and medication price upticks.

The average monthly Social Security check will increase from $1,848 to $1,907, and the maximum benefit will rise to $3,822 monthly in 2024, up from $3,627 in 2023.