Drug companies are preparing to increase prices this month, as January tends to be the month for hikes, and a recent report found that nearly 600 drugs are going to get pricier.
The drug price nonprofit 46Brooklyn Research shared in its report that despite so many drugs increasing, the prices aren’t rising like they did last decade when the average increase was 10%.
Now, the nonprofit’s CEO, Anthony Ciaccia, shared with NPR that prices are expected to rise “around 5%” on average.
Ciaccia added that since 2016, “the pedal to the metal has been kind of pulled back a little bit” with price increases.
But the price hikes aren’t done, as before the end of this month, another couple hundred drugs are expected to get price increases, according to Ciaccia.
However, consumers shouldn’t hang their heads, as this month will also see a huge list of price decreases for the first time, according to 46Brooklyn.
Among the drugs to see price reductions include insulins and inhalers, which saw 70% to 80% markdowns.
Ciaccia says that the falling prices are so much that when you’re doing weighted averages of price changes based on how much a drug is used, they actually cancel out the drug increases.
Part of the reason for the falling costs is legislation passed in 2021 under President Biden that lifted the cap on penalties given to drugmakers who increase prices faster than inflation.
Now, Ciaccia says this has created a reverse effect that’s stopped prices from rising so drastically.
“The end result is drug manufacturers crushing the prices of many of these old products or pulling those products from the marketplace altogether to avoid having to pay the steep penalties to Medicaid programs,” Ciaccia said.