It’s that time of the year again – January is the most prominent time for drug companies to increase list prices of their medications.

With a global pandemic, rising inflation, and continued political pressures, drug pricing will undoubtedly remain a big focus in 2022. This underscores the need for biopharmaceutical companies to be able to clearly communicate the factors behind the price of their medicines to avoid negative scrutiny from policymakers and media that could lead to reputational harm.

Drug price increases this year vs. last:

  • Drug companies appear to be keeping increases in check this January at a time when the industry is under broad scrutiny.
  • Thus far as of January 20, 765 drugs have increased in price by an average of 5.0%.
    • 734 brand drugs increased by an average of 4.8%.
    • 19 generic drugs increased by an average of 12.6%.
    • Among the first 554 increases disclosed this year, nearly 25% exceeded the inflation ratefor the 12-month period that ended in November.
  • In 2021, price increased by an average of 4.6% with 832 drugs – the greatest number of drugs in recent history.

Why this matters:

What can life science companies do:

Manufacturers can continue to develop and refine the value story for their medicines to substantiate pricing. More specifically:

  • Companies that have made promises on price increase limits will need to rethink their approach as caps are introduced for certain products.  
  • Pricing and access philosophies need to revisit those promises in the context of the new (or proposed) rules and consider whether they are indeed meaningful now.
  • Companies with therapies at the cusp of approval need to consider pricing and access in this new context – and rethink their commercial access programs accordingly.  
  • Industry leaders wanting to be on the forefront of meeting policymaker demands may want to consider transparency measures now and not wait until they are required to do so. If they are already trailblazing on this front, they may want to subtly remind stakeholders that they have always been championing patient access and price transparency.

The Syneos Health Reputation & Risk Management team has successfully guided numerous biopharmaceutical companies on how to contextualize and communicate the price and value of their medicines to a broad array of external stakeholders (including those that, importantly, influence policy decisions). To learn more, please reach out to [email protected].

About the Author:

Patrick Rigby joined Syneos from the private sector where he specialized in corporate communication, government relations, and public affairs across the healthcare industry. Patrick served as Director of Communications and later as Chief of Staff for the New Jersey Office of Homeland Security and Preparedness under two administrations. He also served as an Advisor to the Chairman of the U.S. Senate Foreign Relations Committee. Prior to government service, Patrick held positions with Bloomberg L.P., the Council on Foreign Relations, U.S. House of Representatives, and in the financial services industry. Patrick brings with him over 15 years of managing large teams and directing complex communications and reputation management programs for businesses and government.