Drug companies often increase prices at the start of the new year, and 2024 seems to be no exception. There have been about 600 price hikes so far in January, according to the drug price nonprofit 46Brooklyn Research.
But the increases haven't been as steep as they were in some previous years. In the 2010s, drug price hikes were typically much bigger — up to 10% on average
"Since 2016, the pedal to the metal has been kind of pulled back a little bit, where we typically see the weighted average impact of a price increase and the median price increase hovering at around 5%," says 46Brooklyn's CEO, Anthony Ciaccia. That's roughly what he's seeing this year.
Ciaccia expects another couple hundred more drug price increases before the end of the month — and that will account for most brand name price hikes this year.
Net prices are different Even if a drug's sticker price is going up, that doesn't mean the drugmaker is taking all that money home. That's because there's another kind of price to think about called a net price. That's what the drugmaker takes home after rebates it has to pay back to third parties and other discounts.
And on the whole, those rebates have been going up, so the net prices have been going down for about six years now.
Richard Evans, a pharmaceutical industry veteran who runs SSR Health, a drug pricing data and analytics firm, says net prices went down a little faster in 2023 than in previous years.
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