Major global pharmaceutical corporations have decided to raise prices for key drugs such as COVID-19 treatments and cancer medications in the U.S. market beginning early this year. However, the impact of drug price increases in the U.S. on the domestic market is expected to be minimal, as it is rare for drug prices that have been confirmed for health insurance in South Korea to be adjusted simply because prices have risen in other countries.
On March 3 (local time), the U.S. pharmaceutical journal Fierce Pharma reported that global pharmaceutical corporations, including U.S. Pfizer, U.K. Bristol Myers Squibb (BMS), and France’s Sanofi, plan to raise the U.S. list prices of about 250 brand-name drugs starting this month.
Notable examples include Pfizer's COVID-19 treatment Paxlovid and BMS's chimeric antigen receptor T-cell (CAR-T) therapies, Abecma and Breyanzi. These corporations plan to increase investments in new drug development as a result of this price hike.
The drug with the largest price increase is Radiant Pharmaceuticals' Cystaran eye drops for cystine accumulation syndrome, which will rise 20% from the previous $2,300 (3.38 million won) to $2,760 (4.05 million won). The price of the company's Hodgkin lymphoma treatment Matulane will increase 15%, from about $1,460 (approximately 2.14 million won) to about $1,680 (2.5 million won).
Pfizer will raise the prices of more than 60 drugs this year, including Paxlovid. Last year's price increases affected 124 drugs, making up over 25% of the total. The price of Paxlovid is also expected to increase by 3%. A Pfizer official noted, "We adjusted prices to a level lower than the overall inflation rate," adding that "this increase will lead to increased investment in drug development."
BMS raised the prices of Abecma and Breyanzi by 6% and 9%, respectively, while Sanofi increased the prices of about 12 vaccines by 2.9% to 9%.
According to Fierce Pharma, the number of drugs subject to this price increase has risen by more than 100 from the 140 items for which price increases were announced at the end of last year. However, this is a decrease compared to the 500 items that had price increases in January 2024. Additionally, the average price increase for these drugs has trended downward in the past 10 years, remaining below 5%. The median price increase rate for key drugs dropped from 9% in 2015 to 4.5% in 2024.
Nevertheless, there are continued voices opposing price increases by these pharmaceutical firms. Last month, the U.S. non-profit organization Institute for Clinical and Economic Review (ICER) stated that there is "insufficient justification to support the price increases" for the 10 drugs that saw significant price hikes in 2023, noting that "U.S. patients will have to pay an additional $815 million (1.2 trillion won)."
The drugs pointed out by ICER include Gilead Sciences' human immunodeficiency virus (HIV) treatment Veklury, Johnson & Johnson's multiple myeloma treatment Darzalex, Novartis' heart failure treatment Entresto, Exelixis' cancer drug Cabometyx, and Pfizer's rheumatic arthritis and ulcerative colitis treatment Xeljanz.
The impact of this price increase on the domestic market is expected to be minimal. According to the Health Insurance Review and Assessment Service, prices of drugs that have already been confirmed for health insurance coverage in South Korea are not adjusted solely because the pharmaceutical companies raised their prices.
An official from the Health Insurance Review and Assessment Service stated, "While price adjustments have sometimes occurred after health insurance coverage has been confirmed in the country, they mostly happen due to special reasons such as price increases in raw materials or challenges in production. To date, there have been no instances where domestic reimbursement prices were raised solely due to price increases in other countries."