OnDemand WTP Pricing Research

Drugmakers Cancel Price Hikes After California Law Takes Effect | Bloomberg

A handful of the world’s biggest drugmakers are canceling or reducing planned price increases in the U.S., following a new California drug pricing transparency law and continued political pressure over pharmaceutical costs.

The California law, which began to take effect earlier this year, requires drugmakers to give insurers, governments and drug purchasers advance notice of large price increases, as a way of publicly pressuring pharmaceutical companies to keep prices down. In the past three weeks, Novartis AG, Gilead Sciences Inc., Roche Holding AG and Novo Nordisk A/S sent notices to California health plans rescinding or reducing previously announced price hikes on at least 10 drugs.

The drugs include everything from multibillion-dollar blockbusters like Novartis’s psoriasis drug Cosentyx to smaller products, such as Entresto for heart failure and Gilead’s drugs Letairis for pulmonary hypertension and Ranexa for angina. The changes were described by a health plan official who spoke on condition of anonymity because the information isn’t yet public. Drugmakers confirmed most of the pricing decisions.

“Many factors influence our decisions to change product prices for our U.S. portfolio and it is not uncommon for us to adjust plans for price changes,” Novartis spokesman Eric Althoff said in an email. Novartis said it notified some health plans of potential price increases but later decided against implementing them.

Transparency Law
The California measure, signed in October by Governor Jerry Brown, is among the most aggressive efforts by states to peel back the secretive process of setting drug prices. The law requires pharmaceutical companies to notify insurers and government health plans at least 60 days before planned price increases of more than 16 percent during a two-year period.

It also provides a rare window into the complex U.S. pharmaceutical market, where drugmakers sometimes raise list prices multiple times a year, then negotiate discounts and rebates with insurers and drug plans.

Read complete article here:

Drugmakers Cancel Price Hikes After California Law Takes Effect – Bloomberg.