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US watchdog flags top drugmakers for unsupported price hikes

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US watchdog flags top drugmakers for unsupported price hikes

A U.S. drug pricing watchdog has found that substantial price increases on seven major drugs by AbbVie Inc., Amgen Inc. and other major pharmaceutical companies were made without evidence and cost Americans $1.2 billion in 2019.

The Institute for Clinical and Economic Review, known as ICER, named seven drugs that had "significant" price increases in 2019, even after rebates to customers, that were not supported by any clinical evidence.

ICER is a nonprofit reviewer of healthcare costs. While the U.S. organization's advice is nonbinding, its influence has been building in recent years amid a national debate on drug prices.

Amgen's immunology drug Enbrel topped the list with an 8.9% net price increase, costing $403 million in U.S. drug spending, according to the Unsupported Price Increase Report. The company reported $5.05 billion in U.S. 2019 sales for the therapy, which treats rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and other diseases.

While Amgen submitted 17 references to justify the new price point, ICER said all but one were not considered new clinical evidence that might justify the higher cost, and the studies were deemed "low-quality evidence."

Invega Sustenna/Invega Trinza, a combination of drugs used as antipsychotics and made by Johnson & Johnson unit Janssen, was second on the list with a 10.7% price increase and amounted to $203 million in spending. The drugs brought in a reported $2.11 billion in the U.S. for the world's largest healthcare company in 2019.

Third on the list was Xifaxan, an antibacterial drug for traveler's diarrhea and other conditions, made by Bausch Health Cos. Inc.'s Salix Pharmaceuticals unit. The drug has been on the market since 2004. The price of the therapy jumped 13.3% in 2019, costing the U.S. healthcare system $173 million.

Other drugs named were Bristol Myers Squibb Co.'s Orencia, Biogen Inc.'s Tecfidera, AbbVie's Humira and UCB SA's Vimpat. Humira has been the world's bestselling drug for several years.

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ICER Chief Medical Officer David Rind said public scrutiny on annual price hikes, higher pharmaceutical rebates and a rise in generic-drug utilization have helped stabilize drug prices in the U.S. over the past two years. Nevertheless, the cost of some brand name drugs continues to rise, even with rebates.

"Even more concerning, several of these treatments have been on the market for many years, with scant evidence that they are any more effective than we understood them to be years ago when they cost far less," Rind said. "If new data emerge that show a treatment may be more beneficial than what was previously understood, perhaps some level of price increase is warranted."

For the analysis, ICER examined the top 100 drugs by U.S. sales revenue that experienced a price increase and allowed for public comment, which brought Enbrel to the top of the list.

Responding to Enbrel's inclusion, Amgen said in submitted evidence that the list price increase was in line with the about 20 other drugs that compete in the same market. The company said ICER's criteria does not account for the complex nature of the U.S. drug rebate program.

Three drugs were found to have price increases that were backed by new, important positive clinical data: Novartis AG's Entresto, Takeda Pharmaceutical Co. Ltd.'s Entyvio and Astellas Pharma Inc.'s Xtandi.

ICER noted that while new evidence was presented for these three treatments, the level of increase was not necessarily justified. The organization has not performed a full cost-benefit analysis of these therapies.

Cost of insulin drops

ICER also specifically spoke to price increases for insulin after lawmakers requested an examination of this class of medicine.

The organization found that seven of the 10 top insulin products sold in the U.S. accounted for more than $500 million in revenue in 2019. Some of the products did experience list price increases in the year, but the net price paid by the U.S. health system on nine products was actually lower compared to 2018 after rebates.

Challenges remain for uninsured patients, those who have not yet reached their deductible and have to pay the full, nonrebated price and those who have to pay a portion of a drug's list price as coinsurance, despite the benefit to the overall health system, ICER noted.

The first Unsupported Price Increase Report was issued by ICER in October 2019, finding that unsupported price changes cost Americans an additional $4.8 billion in 2017 and 2018. Humira and Tecfidera have appeared on both lists.