In the pharmaceutical world, price hikes have been the gifts that keep on giving because the hefty cumulative effects of rising price tags greatly help year-over-year revenue growth. But a new analysis suggests the trend will slow considerably as drug makers face political pressure over pricing practices.
To wit, the compounded effect of rising prices contributed, on average, 5 percent in revenue growth annually over the last five years. Although total revenue growth slowed over the past year to around 1 percent, without price increases, the sales growth would have declined by a notable 6 percent, according to Leerink analyst Geoffrey Porges, who analyzed data for 17 large drug makers.
Here is another telling statistic about what those price hikes have meant: More than 20 percent of the $320 billion in biopharma revenue notched in the first three quarters of this year can be attributed to the cumulative effect of price increases over the last five years.
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Further confirmation of how dependent pharma has become on price increases — rather than new-therapy launches and/or market expansion for existing therapies — as their main engine of “sales growth.” I’ve often observed that this is rather like driving an out-of-gas car by repeatedly engaging the starter motor while in gear. For a while, it will create forward (if somewhat lurching) motion, but ultimately it will burn out the motor.
Xarelto pharmaceutical needs stopped and recalled due to there bleeding problem And J&j needs to settle out of court settlement agreement for the people’s pain and suffering from severe bleeding due to this medication
Ed,
I wonder when the Feds are gonna address or if they’re gonna address the
PBM issue. How many more states have to be robbed of millions before they see
the light ?