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Drug Prices Increasing in January

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1 minute read

Several pharmaceutical companies plan to raise prices on over 500 drugs in January, including 140 brands. Companies say that high inflation and supply chain concerns in the Middle East have impacted these price increases. However, there has been increased scrutiny and regulation of pharmaceutical drug prices in recent years, including the 2022 Inflation Reduction Act (IRA).

The Biden administration is also making efforts to lower drug costs through Medicare price negotiations, with the first 10 prescription drugs subject to negotiation under the IRA. The discount rates are scheduled to become effective in 2026. Over the next four years, Medicare will negotiate prices for up to 60 Medicare Part D and Part B drugs, and an additional 20 drugs every year after that.

Most drugmakers historically raise prices in January, and despite the trend, some companies are expected to lower prices on certain drugs. Some insulin prices will decrease so companies can avoid paying penalties under the 2021 American Rescue Plan Act. According to drug pricing nonprofit 45brooklyn, the median increase in drug prices has averaged 5% since 2019, with newly launched drugs reaching record levels.


Employer Takeaway

Rising healthcare costs in 2024 pose challenges for employers and employees. To improve morale, productivity, and retention, employers should take proactive measures to address workers' concerns and educate them on becoming wise healthcare consumers. Download the bulletin for more details.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Ken Zastrow

Ken Zastrow

Ken Zastrow enjoys establishing a strong rapport with his clients. He believes that education is key in helping them understand their benefit plans. Ken has a strong background in both active and post-employment benefit strategies. As Employee Benefits Consultant at National Insurance Services, Ken is responsible for the overall assessment and management of all an employer’s benefit plans including claim reconciliation, policy changes, renewals, and medical and dental analytics. He is also well versed in compliance, benefit integration, and early retiree benefits. Ken is a licensed health and life insurance agent, working with schools, cities, and counties in the Midwest Region.