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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.
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.