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Illustration: Eniola Odetunde/Axios

The average launch prices for new brand-name drugs have skyrocketed over the past decade, according to an analysis from drug research firm 46brooklyn.

Why it matters: The U.S. prescription drug market increasingly has thrived on high initial price tags and subsequent increases. That has resulted in higher premiums and out-of-pocket costs for new drugs, as well as more expensive generics.

Between the lines: Pharmaceutical companies are not raising prices of existing drugs as frequently as they used to, due in part to political heat. However, more new drugs are coming out with 6- and 7-figure list prices — most notably drugs like Zolgensma and Luxturna.

  • Higher starting prices for brand-name drugs are costly on their own, but they also beget higher starting prices for their generics.

By the numbers: Using data from Elsevier's Gold Standard Drug Database and the federal government, analysts at 46brooklyn organized the launch prices of both brand and generic drugs for each year they came out, going back to 2006.

  • The median monthly price of a new brand-name drug has increased 381% since 2006 (from $150 to $722).
  • The median monthly price of a new generic drug has increased 712% since 2006 (about $100 to almost $800).
  • These are list prices, not net prices, and therefore do not reflect any rebates given by manufacturers to middlemen. But these prices still affect patients' out-of-pocket costs, and some list prices could be close to actual net prices paid depending on the contract and marketplace.

One step further: Almost 80% of all generic drugs studied had no decrease in their average wholesale price in the past 5 years.

The bottom line: There is systemic failure in the pharmaceutical market. Rising starting points for drugs benefit every entity, except patients.

  • Brand-name drugmakers reap the first rewards and usually don't provide a lot of, if any, rebates for new drugs with no competitors.
  • Generics manufacturers often don't lower prices by much after a drug patent elapses.
  • Pharmacy benefit managers pocket the difference between what they charge insurance programs for overpriced generics and what they pay pharmacists.
  • Wholesalers and pharmacists collect their smaller cuts along the way.

Go deeper: The drug pricing maze

Editor's note: This post has been updated to note the analysis looks at list prices, not net prices.

Go deeper

7 hours ago - World

Maximum pressure campaign escalates with Fakhrizadeh killing

Photo: Fars News Agency via AP

The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.

Scoop: Biden weighs retired General Lloyd Austin for Pentagon chief

Lloyd Austin testifying before Congress in 2015. Photo: Chip Somodevilla/Getty Images

Joe Biden is considering retired four-star General Lloyd Austin as his nominee for defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

Updated 9 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. World: Thailand, Philippines sign deal with AstraZeneca for vaccine.
  4. Economy: Safety nets to disappear in December Black Friday shopping across the U.S., in photosAmazon hires 1,400 workers a day throughout pandemic.
  5. Education: National standardized tests delayed until 2022.