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, Axios' Bob Herman writes.
Between the lines: Pharmaceutical companies are not raising prices of existing drugs as frequently as they used to. 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).
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.
Go deeper: The drug pricing maze