About a quarter of the drugs launched last year had an annual net price exceeding $500,000 — part of a trend in which manufacturers are charging historically high sums for new products, according to a new report.

Why it matters: At a time when voters say the cost of prescription drugs is crushing their finances, manufacturers may be trying to maximize profits before future government price negotiations eat into revenues, suggests the report from the independent drug price watchdog ICER and West Health.

• 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 FDA 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.

A new administration plan for kidney care calls for injecting more competition into treatment markets, incentivizing innovation and focusing more on preventive care, Axios first reported.

Why it matters: Chronic kidney disease is common, expensive and deadly. But it often goes undetected until patients enter late stages when treatment options are more limited.

Driving the news: Health Secretary Robert F. Kennedy Jr. unveiled the plan yesterday in Fort Worth, Texas, as part of a broader agenda aimed at fighting chronic disease.

• It comes on the heels of a crackdown on organ donation organizations that are typically compensated based on transplant and donation rates.
• The new plan takes a more holistic approach, proposing ways to address what it calls "structural deficiencies" in care.
• It calls for changes to the dialysis market — now dominated by industry giants DaVita and Fresenius — as well as the transplant system.

Between the lines: The plan takes the view that government overreach is partly responsible for some of the system's failures, arguing that "in many cases, government should do less, focusing its efforts on promoting accountability, competition, and innovation."

• It also blames heavy consolidation, particularly within the dialysis market, where the two chains constitute roughly 74% of the market.
• This consolidation, it argues, allows dominant players to leverage their market power into higher prices.
• When it comes to prevention of kidney disease, the report argues that a primary barrier is the federal government's role in paying for end-stage renal disease care. That removes the incentive for private insurers to invest in more care before patients get very sick.

What's inside: The report calls for fewer barriers to competition in the dialysis market, better incentives and stronger oversight within the transplant system.

• It suggests that the Center for Medicare and Medicaid Innovation should have a role in developing a payment model that promotes better diagnosis and treatment for patients with early-stage kidney disease.

The intrigue: HHS is calling for traditional free market approaches while framing a kidney care overhaul as squarely within Kennedy's chronic disease agenda.

Varda Space Industries launched a new mission yesterday to test microgravity's effects on an innovative cancer treatment.

Why it matters: Developing medicine in space, away from the pesky influence of Earth's gravity, could unlock better treatments — though commercial scale for "space meds" is still a moonshot.

Driving the news: The California company's W-7 spacecraft launched into orbit from Cape Canaveral, Florida, on a SpaceX Falcon 9 rideshare mission.

• Varda is testing whether the key ingredient in next-generation cancer medicines called PROTACs will crystalize differently in microgravity than it does on Earth.
• That could make the treatment easier for recipients' bodies to absorb.

What they're saying: "We are exploring a new class of cancer drugs that are very innovative, but have problems with dissolving in the body," Varda chief strategy officer Michael Reilly tells Axios.

• "So the premise is that in space we can create unique crystals that have superior dissolution properties, and therefore can be far more effective and perhaps safer as well."
• Reilly adds that, for missions like this one, the company can create "seed quantities" in space, then return the results to Earth to be propagated.

"We do this with manufacturing scale in mind," Reilly says.

• "We understand the process and conditions that will eventually lead to manufacturing at appropriate scale — and then with that in mind, we fly this mission, which essentially is a first test of that hypothesis: Can we produce unique crystals in quantity in space?"

How it works: Microgravity lets pharmaceutical compounds crystalize without disruptive processes like sedimentation and convection, potentially leading to better solubility, efficacy and other benefits.

• There's a long history of fruitful microgravity crystallization experiments — many aboard the International Space Station.

Zoom in: This is Varda's third launch of the past month. It aims to ramp up in 2027, with seven planned launches compared with four this year.

• Varda's W-series spacecraft work autonomously in orbit and return to Earth at hypersonic speeds.
• The company recently announced a $251 million series D fundraising round led by Lux Capital and Natural Capital.
• Aside from space-based pharmaceuticals, Varda also has a defense business involving hypersonic testing and data-gathering.

The big picture: Orbital reentry vehicles are hot in the commercial space world, with SpaceX recently testing its "Starfall" capsule designed for space manufacturing and rapid point-to-point delivery.

What's next: Reilly says that Varda is planning a mission involving a pulmonary disease treatment from United Therapeutics "sometime next year."