Trends in Prescription Drug Launch Prices, 2008-2021

Prescription drug spending in the US exceeded half a trillion dollars in 2020.¹ Spending is driven by high-cost brand-name drugs, for which manufacturers freely set prices after approval.² Rising brand-name drug prices often translate to payers restricting access, raising premiums, or imposing unaffordable out-of-pocket costs for patients. We evaluated recent trends in prices for newly marketed brand-name drugs.

We identified drugs newly marketed from 2008 to 2021 within SSR Health, a database with quarterly wholesale acquisition cost (ie, list prices) and estimated net prices after manufacturer discounts for more than 1230 brand-name products.³ For drugs with multiple dosage forms, we included the first marketed version. Price per unit was converted to price per year (or course of treatment, if <1 year) based on US Food and Drug Administration (FDA)–approved labeling; in cases of weight-based dosing, US population averages were used. Prices were converted to 2021 dollars using the Consumer Price Index for All Urban Consumers.

We used linear regression to estimate trends in mean launch prices, which were log transformed to improve normality and fit observed exponential trends. We adjusted for drug characteristics, including biologics vs small molecules, novel active ingredients vs reformulations, accelerated vs traditional FDA approval, Orphan Drug Act designation for rare conditions vs nonrare conditions, oncology vs nononcology indications, and oral vs injected vs other route of administration. In a secondary analysis, we included interaction terms between each characteristic and time to determine if trends varied between subgroups (2-tailed; P < .05). In another secondary analysis, we used estimated net prices after manufacturer discounts among non-Medicaid payers, if such estimates were available from SSR Health within 1 year after launch. Analyses were performed using SAS version 9.4 (SAS Institute Inc).

We included 548 of 576 drugs (95%) first marketed in 2008-2021, excluding 3 diagnostics and 25 drugs for which we could not estimate price per year (eg, as-needed use). Overall, 357 (65%) were new molecules, 139 (25%) were biologics, 182 (33%) treated rare diseases, 64 (12%) received accelerated approval, 119 (22%) were oncologic agents, and 282 (51%) were orally administered (Table). The highest prices were among drugs for rare diseases (median, $168 441 [IQR, $78 291-$338 379] per year) and oncology drugs (median, $155 091 [IQR, $109 832-$233 916] per year).

Median launch prices increased from $2115 per year (IQR, $928-$17 866) per year in 2008 to $180 007 (IQR, $20 236-409 732) per year in 2021 (Figure). The proportion of drugs priced at $150 000 per year or more was 9% (18/197) in 2008-2013 and 47% (42/89) in 2020-2021. Unadjusted mean launch prices increased exponentially by 20.4% per year (95% CI, 15.3%-25.8% per year). Adjusting for drug characteristics, mean prices increased exponentially by 13.0% per year (95% CI, 9.4%-16.7% per year). Most drug characteristics were independently associated with launch price, and including interaction terms revealed that launch prices increased more quickly among biologics, drugs treating rare diseases, and nononcology drugs (Table).

Estimated net prices were available for 395 drugs (72%); these net prices were a median of 14% lower than the wholesale acquisition cost in 2008 and 24% lower in 2020. Net prices increased from a median of $1376 (IQR, $693-$10 897) in 2008 to $159 042 (IQR, $31 187-$380 509) in 2021. Adjusting for drug characteristics, mean net prices increased exponentially by 10.7% per year (95% CI, 6.3%-15.2% per year).

From 2008 to 2021, launch prices for new drugs increased exponentially by 20% per year. In 2020-2021, 47% of new drugs were initially priced above $150 000 per year. Prices increased by 11% per year even after adjusting for estimated manufacturer discounts and changes in certain drug characteristics, such as more oncology and specialty drugs (eg, injectables, biologics) introduced in recent years. The study was limited to drugs sold by public companies; SSR Health net price estimates have limitations, including underestimating net prices paid by payers.^3,4

The trend in prices for new drugs outpaces growth in prices for other health care services.⁵ Even after drugs are marketed, manufacturers routinely increase prices over time; in another analysis, net prices increased by 4.5% per year from 2007 to 2018.³ In response to the current trends, the US could stop allowing drug manufacturers to freely set prices and follow the example of other industrialized countries that negotiate drug prices at launch.⁶

Accepted for Publication: March 24, 2022.

Correction: This article was corrected on June 7, 2022, to update data in the Table as a result of a reanalysis. The adjusted numbers do not affect the primary outcome.

Corresponding Author: Benjamin N. Rome, MD, MPH, Brigham and Women’s Hospital, Program on Regulation, Therapeutics, and Law (PORTAL), 1620 Tremont St, Ste 3030, Boston, MA 02120 (brome@bwh.harvard.edu).

Author Contributions: Dr Rome had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: Rome, Kesselheim.

Acquisition, analysis, or interpretation of data: All authors.

Drafting of the manuscript: Rome.

Critical revision of the manuscript for important intellectual content: Egilman, Kesselheim.

Statistical analysis: Rome.

Obtained funding: Kesselheim.

Supervision: Kesselheim.

Conflict of Interest Disclosures: None reported.

Funding/Support: This work was funded by a grant from Arnold Ventures.

Role of the Funder/Sponsor: Arnold Ventures had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.