Despite all the debate over prescription drug costs, what is not always clear is just how much price hikes matter to the pharmaceutical industry. And a new analysis finds, not surprisingly, they matter a lot.

Overall, price increases contributed a whopping 61 percent of the 28 percent growth in U.S. sales for 45 of the biggest-selling medicines over the past three years. Put another way, price hikes generated roughly $14.3 billion of the $23.3 billion in sales growth for those medicines from 2014 to 2017, according to a report by Leerink analyst Geoffrey Porges.

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  • The gross-to-net issue is certainly salient to the question of what actual value PBMs add to the value chain. But no Big Pharma player has taken a loss as a result of rebates. On the contrary, they have continued to grow. And repeated analyses have demonstrated that, the trickle of NMEs introduced each year notwithstanding, the chief engine of growth for Big Pharma today continues to be, not research-based innovation, but pricing. And it doesn’t take too much sophistication on the part of “observers” to see the unsustainability of that model.

    • I agree, Bruce Grant, and did also observe (silently) that this study does not include the …. shall we say “usorious” … price increases for older generic drugs in recent years.

  • Raising your prices and calling it “growth” is like bucking your out-of-gas car forward by engaging the starter motor in gear and calling it “driving.”

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