High drug launch prices stress health system, report says

• The findings underscore the challenges ahead for the Trump administration as it tries to use "most favored nation" pricing deals and Medicare price negotiations to lower U.S. drug spending.

The big picture: Scientific breakthroughs have ushered in a golden age of medicine, with numerous targeted therapies, rare disease drugs and new cancer treatments in the pipeline or coming to market.

• The problem is that they're arriving with high price tags, driving up overall health spending and posing affordability challenges for both payers and patients.

Driving the news: The median launch price of newly approved medicines rose 35% from 2022 to 2025 when adjusted for inflation, reaching $257,000 last year, per the report.

• The median price actually decreased by 2% from 2024 to 2025. But about 1 in 4 drugs introduced last year still had an annual net price exceeding $500,000, and another 34% were launched at prices between $200,000 and $500,000.
• Only about 1 in 3 newly approved drugs that ICER reviewed were priced at or below the price range it determined was cost effective.
• The report focuses on the "net price," or the actual price paid after rebates and discounts, instead of the publicly available "list price" of a drug.

Between the lines: The report covers a period during which more "orphan drugs" for rare diseases, multimillion-dollar gene therapies and pricey cancer treatments won Food and Drug Administration approval.

• But even after accounting for drug characteristics, the median annual net launch price increased by 18% per year.
• ICER has estimated there was more than $1 billion of excess drug spending for 15% of the drugs the FDA approved between 2022 and 2024.

Threat level: A significant proportion of prescriptions for newly launched drugs were rejected due to insurer coverage restrictions.

• For 26 outpatient drugs ICER analyzed, almost two-thirds of prescriptions billed to Medicare were rejected within 30 days of the initial claim, either because the drug wasn't covered or because it was subject to policies like pretreatment reviews.
• Insurers can take up to a year evaluating whether to cover a drug and place it on their formularies.
• ICER CEO Sarah Emond said the U.S. is at a critical moment, producing more innovative cures even as patients are experiencing significant barriers to care.

The other side: The drug industry trade group PhRMA said the report's methodology is flawed and overlooks long-term pricing trends and factors like competition from generics.

• "Even ICER's biased methodology, which undervalues new medicines, can't hide the fact that drug prices have been flat or declining for years," said spokesperson Chanse Jones.
• Jones noted the report did confirm that coverage rejections have become the norm for new medicines and that administrative hurdles delay and can deny patients access to treatments.

State of play: The findings come as drugmakers and the Trump administration are engaged in a game of chess over efforts to use MFN pricing deals and Medicare drug price negotiations to lower health costs.

• The administration touts the MFN deals as a signature health policy achievement, but most of the details remain confidential, including how the new prices are calculated.
• It's possible that the government could secure discounts on older, established prescription drugs while manufacturers continue introducing expensive new therapies.
• But it will take time to measure the effects. The report covers a period before most of the MFN deals were struck.

What we're watching: The dealmaking envisions drugmakers not charging the U.S. more than other developed countries when they launch new products.

• But industry critics have long predicted that manufacturers will simply delay launching new products in other countries to get around that requirement.

Caitlin Owens contributed to this report.