Editors' pick: Originally published Jan. 3.
New year, same old appetite by drug companies to raise prices.
A bunch of specialty pharma companies just boosted prices on key therapies for the year ahead, with Allergan (AGN) among the most notable after CEO Brent Saunders in September publicly condemned companies in the sector for aggressive or predatory price increases.
The pricing on nine Allergan products effectively increased on Jan. 1, but the company did remain within its promise to limit price increases to a single-digit percentage as promised in the fall. Pricing on each of the products will be increased by either 9% or 9.5%, according to a Jefferies report on Tuesday that notes a lag of several weeks is typical before new pricing is reflected.
Allergan's "social contract with patients" was revealed in a September blog post by the chief executive in the wake of public outcry around drugmakers such as Mylan (MYL) for its anticompetitive measures to boost rates for its EpiPen used to save the lives of individuals suffering an allergic reaction.
"The price increases are the first since the Social Contract was introduced in September 2016 and they are consistent with its commitments," Allergan spokesman Mark Marmur wrote in an email Tuesday morning, adding that this will be the only increase in 2017 for these brands.
The basket of key brands victim to price increases at Allergan this year include Bystolic, Delzicol, Estrace, Lo Loestrin Fe, Lumigan, Minastrin, Linzess, Namenda XR and Restasis.
Earlier on Tuesday, the company in response to a tweet by TheStreet's Adam Feuerstein that noted 2017 drug price increases, replied:"@adamfeuerstein we raised prices for 2017 all single digits & net increase '17 vs '16 expected to be ~2-3% post discounts/rebates $AGN 1of2."
Marmur reiterated this in his email, and added that "discounts to commercial PBMs, health plans and government payers bring the net realized increase in price down to the low single digits (~2-3%)."
Evercore analyst Umer Raffat noted in a Tuesday research note that Allergan did not implement price increases on products approaching patent expiry near-term.
Saunders in his September blog post had pledged that while Allergan had participated in this industry practice in the past, it will stop engaging in this pricing ractice going forward.
Other notable specialty pharma companies that raised prices on products in the new year include Horizon Pharma (HZNP) , which according to Jefferies increased the prices of six drugs by 9.9%, effective Dec. 30. Teva Pharmaceutical Industries (TEVA) hiked the prices of three products between 6% and 9.4%.
Horizon, for its part, raised the prices of Actimmune, Duexis, Krystexxa, Pennsaid, Procysbi and Ravicti. Teva increased prices on Azilect, Copaxone and Proair HFA/Respiclick.
Others drugmakers in the group that increased prices, according to the Jefferies note, include Insys Therapeutics (INSY) , Nektar Therapeutics (NKTR) , Perrigo (PRGO) and privately held Purdue Pharma, all of which increased the price on one product.