Drugmakers are only partially complying with a new California law that requires they disclose price increases; most ignored the requirement that they cite reasons for those increases.
Among the 1,020 drug price increase reports submitted to the Office of Statewide Health Planning and Development, or OSHPD, 68% did not give any explanations, despite the law's requirement that they show how expenses and drug improvements necessitated the price increases.
The industry has not had to justify price increases before, said Anna Kaltenboeck, program director and senior health economist in Memorial Sloan Kettering Cancer Center's Center for Health Policy and Outcomes. The questions companies left unanswered invite further inspection, she said.
"Those questions don't just go away," Kaltenboeck said. "They kind of stick around and continue to raise other questions. In that sense, transparency is doing what it's supposed to."
Nonetheless, OSHPD's first data release triggered by the 2017 drug price transparency law was eye opening. Drugmakers, whose trade group is currently suing OSHPD to stop the data releases, reported a 25.8% median increase in the wholesale acquisition cost, or list price, of prescription drugs in the first quarter of 2019 over the previous two calendar years, or roughly 8% per year. The inflation rate was 2% over the same period, OSHPD noted.
Some price hikes were far greater. The anti-anxiety, anti-seizure medication Ativan is the most expensive drug in OSHPD's data, with a list price of $32,336 as of January, a 370% increase from before Jan. 31, 2014. The drug, priced for a 1,000-pill package that pharmacies use to fill multiple prescriptions, jumped 134% in price in 2014 alone.
Lainie Keller, a spokeswoman for Bausch Health, the company that makes Ativan, wrote in an email that new leadership in May 2016 established its current pricing approach, which limits annual increases on branded prescription medications to single digits.
The drug Xenazine, used to treat a movement disorder caused by Huntington's disease, cost $28,200 as of January 2019 for 112, 25-milligram tablets, a 156% increase since before January 2014. The manufacturer, Lundbeck, said in a statement that the price adjustment reflects the cost of research and development, the small patient population that takes the medication, market conditions and patient assistance programs.
“The biological processes involved in brain diseases are very complicated,” Lundbeck spokeswoman Ashleigh Duchene wrote in an email. “This creates significant hurdles in R&D for diseases where there remains high unmet need for additional therapies.”
A course of the chemotherapy drug Afinitor costs $15,707 for a 5-milligram dose, a 94% increase from before January 2014. Novartis, the company that makes Afinitor, did not return a request for comment.