Examining Launch, Post-Launch Price Developments in the United States and Europe

When it comes to the pharmaceutical industry, the high price of new drugs continues to be top of mind. In the United States alone, between 2021 and 2022, overall drug spending increased by 9.4%, totaling $635.5 billion in 2022. Europe is also experiencing challenges in this regard, rising by 5.2% and 6.5% in Germany and Switzerland respectively. In fact, there is a correlation between drug prices and rising costs.1

Of course, every country could have different manners in which they determine drug prices. For example, via the US’ Inflation Reduction Act, beginning in 2026, the federal government will negotiate prices for certain brand-name drugs with at least nine years post approval; in fact, this past March, it was revealed that will be more proactivity when it comes to decreasing drug costs, such as growing the number of brand-named drugs that are price-negotiable each year.2,3

Keeping this information in mind, a cohort study published in JAMA Health Forum4 sought to dig deeper into these issues, by examining launch and post-launch price developments of new drugs in the US, Germany, and Switzerland.

During a collection and analysis period that ran between January and September 2024, investigators classified all new drugs that were approved in the US, Germany, and Switzerland during the Jan. 1, 2011, and Dec. 31, 2022 timeframe, with the help of public databases. These databases pertained to the FDA, European Medicines Agency, the Medicines and Healthcare Products Regulatory Agency, and Swissmedic. Information—including approval dates and approved indication—were pulled from these sources.

In total, the cohort study featured 787 cancer drugs: 254 drugs in the US, 298 in Germany, and 235 in Switzerland. For the US, the mean (SD) launch prices rose from $31,699 ($36,439) in 2011 to $228,658 ($571, 252) in 2022, representing an average increase of 19.7% per year. In Germany, mean (SD) launch prices increased from $77,237 ($228,672) to $146,072 ($306,091), an average increase of 6.0% annually. In Switzerland, mean launch prices increased from $29, 211 ($41,919) to $41,399 ($39 ,697), with an average yearly increase of 3.2%.

Post-launch, the trimmed average prices of drugs featured in the cohort increased −0.6% at 3 years, 2.4% at 5 years, and 4.1% at 10-years post-launch in the US. There was a larger increase of post-launch prices for cancer drugs compared with noncancer drugs. In Germany, trimmed mean drug prices decreased −30.9% at 3 years, −33.4% at 5 years, and −45.2% at 10 years post-launch, while in Switzerland, trimmed mean drug prices decreased −9.3% at 3 years, −13.5% at 5 years, and −29.5% at 10 years post-launch. Interestingly enough, for both Switzerland and Germany, post-launch price developments were similar for cancer and noncancer drugs, although cancer drug treatment costs stayed considerably higher when compared to noncancer drugs.

“The results of this cohort study suggest that, in the US, prices of cancer drugs increased substantially post launch, while an increase was not observed for non-cancer drugs,” concluded the study authors. “Prices for cancer and non-cancer drugs decreased substantially post launch in Germany and Switzerland, but drug prices for cancer drugs continued to be substantially higher than non-cancer drugs. When developing solutions how drug prices can be lowered, which ultimately improves access for patients to new drugs, policymakers should address not only launch prices but also price changes post launch, especially for cancer drugs.”

References

1. US Congressional Budget Office. Prescription drugs: spending, use, and prices. Accessed November 13, 2024. https://www.Cbo.Gov/Publication/57772

2. US White House. Fact sheet: President Biden takes new steps to lower prescription drug and health care costs, expand access to health care, and protect consumers. Accessed October 18, 2024. https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/06/fact-sheet-president-biden-takes-new-steps-to-lower-prescription-drug-and-health-care-costs-expand-access-to-health-care-and-protect-consumers/

3. US Congress. Inflation Reduction Act of 2022, HR 5376, 117th Cong (2022). Accessed November 13, 2024. https://www.congress.gov/bill/117th-congress/house-bill/5376

4. Laube Y, Serra-Burriel M, Glaus CCEG, Vokinger KN. Launch and Postlaunch Price Developments of New Drugs in the US, Germany, and Switzerland. JAMA Health Forum. 2024;5(11):e244461. doi:10.1001/jamahealthforum.2024.4461