As anger mounts over the cost of prescription medicines, a new analysis finds that brand-name drug makers increased their list prices by 5.5 percent in last year’s fourth quarter, but after subtracting various allowances, their net pricing fell by 1.1 percent.
And the average concession off the list price, which is also known as the wholesale price, was 41 percent, according to Sector & Sovereign Research, which tracks the pharmaceutical industry. These concessions included rebates paid to pharmacy benefit managers, allowances given to wholesalers, fees paid to retailers, provisions for returned goods, and the cost of any copay card or coupon programs.
The figures dovetail with an industry argument that even as list prices may rise, drug makers are actually seeing reduced pricing after paying for such discounts. In recent weeks, both Merck (MRK) and Johnson & Johnson (JNJ), for instance, released data showing similar trends. In 2016, their average net prices fell from the year before after applying discounts, even as they raised their list prices.