US Drug Companies to Raise Prices on 250 Drugs by Over 4.5% in 2025

According to an analysis by 3 Axis Advisors, American pharmaceutical companies plan to raise the prices of at least 250 brand-name drugs in early 2025. These drugs include Pfizer's COVID-19 treatment Paxlovid, Bristol Myers Squibb's cancer treatment drugs, and Sanofi's vaccines. While most drug price increases are below 10%, the median increase on January 1 is 4.5%, consistent with last year.

Pharmaceutical companies have reduced the extent of price increases in recent years after facing criticism for significant price hikes over the past decade. Notably, the price increase figures do not include rebates and other discounts from pharmacy benefit managers. In the US, substantial price increases for drugs used to be more common, but pharmaceutical companies have reduced their price hikes in response to public criticism.

3 Axis Advisors' President Antonio Ciaccia noted, "Pharmaceutical companies have limited room to raise prices, meaning their only option is to take greater liberties with the launch prices." A Reuters analysis shows that the prices of new drugs in the US in 2023 were 35% higher than in 2022. Compared to December 29 of last year, over 140 brand-name drugs have announced price hikes, with more than 250 drugs seeing increased price margins.

Additionally, pharmaceutical companies will also lower the prices of some drugs on January 1. For example, Merck & Co announced significant reductions in the price of its diabetes drugs Januvia and Janumet to bring their prices closer to the net price.

The US has the highest spending on prescription drugs globally, and incoming President Donald Trump promised to lower drug costs by focusing on middlemen in the healthcare system. Other pharmaceutical companies may announce more drug price increases in January, as historically, January has been the month with the highest price hikes.

Pfizer has increased the prices of most of its drugs, raising prices on over 60 drugs, including Paxlovid. The company raised the price of Paxlovid by 3%, while several other drugs saw price increases of 3% to 5%. Pfizer spokesperson Amy Rose stated in an email that the company has adjusted the average list prices of drugs and vaccines for 2025 to be below the overall inflation rate, at about 2.4%. She emphasized that this increase helps support investments in drug development and offsets costs.

Bristol Myers Squibb raised the prices of its expensive cancer cell therapies Abecma and Breyanzi by 6% and 9%, respectively. A spokesperson for BMS mentioned the company's commitment to ensuring patients can access their drugs easily and noted that the price of Breyanzi reflects its potential transformative personalized treatment.

Sanofi increased the prices of several vaccines by 2.9% to 9%. According to 3 Axis's analysis, the brand with the largest increase is Leadiant Pharmaceuticals under Essetifin in Italy. The company raised the price of the drug Matulane, used to treat Hodgkin's disease, by about 15%, and the eye drops Cystaran, used for the rare cystinosis disease, by about 20%. Spokespersons for Leadiant and Sanofi did not immediately respond to requests for comments.