Super-sized drug price hikes are gone. The profits aren't.
Many drug companies have conceded that the days of super-sized price increases, which sometimes occurred multiple times per year, are gone for now. President Trump's rhetoric around price controls and public outrage over high drug costs have forced the industry to soften, as it heavily lobbies politicians behind the scenes.
So does that mean the drug industry will lose a lot of money? Not really. First-quarter reports show many of the largest pharmaceutical companies increased their profits compared with the same period last year. Sales of some drugs lagged, but companies still hiked list prices by high single digits — well above general inflation.
A handful of major pharmaceutical firms reported higher first-quarter earnings this week. Part of that was due to cutting back on operating expenses, like research and marketing, but list prices were also raised for many drugs.
- Amgen: Profit jumped 9%, surpassing $2 billion, even though sales declined. Amgen raised the list price of its major rheumatoid arthritis drug Enbrel by 8.4% in January, according to data obtained by Axios, as a way to offset competing drugs.
- AbbVie: Profit soared 26%. Arthritis blockbuster drug Humira, which got an 8.4% list price boost in January, continues to be the company's biggest earner.
- Bristol-Myers Squibb: A 32% jolt to earnings came thanks to big sales of cancer drug Opdivo.
- Celgene: First-quarter profit almost hit $1 billion as demand for multiple myeloma drug Revlimid took off. Celgene raised the list price of Revlimid by 8% in January.
- Biogen: Sales of its multiple sclerosis drug Tecfidera basically stayed the same despite an 8% price hike in January. Biogen's profit declined, but it was still around three-quarters of a billion dollars.
- Eli Lilly: Lost money due to severance and acquisition costs, not because people weren't buying their drugs.