A giant drugmaker just set the strictest price-increase caps of the industry

pulse

May 9, 2017 12:24 PM

Sanofi says it won't increase the price of its drugs in the US higher than the rate of health inflation.

Drug manufacturers have been feeling the heat over the price increases they make on prescription drugs.

Sanofi, which makes drugs to treat diabetes, along with vaccines and heart medications, has been criticized for the price of its insulin Lantus.

To counter that, the French drug giant has decided to make some of the strictest drug-pricing commitments in the industry.

Among Sanofi's new pricing promises:

The approach is a bit of a departure from other players in the pharma industry. In September, Allergan committed to only single-digit drug-price increases (a line it closely hugged for some drugs). Novo Nordisk, another diabetes drugmaker, also committed to capping increases to single digits.

Cybele Bjorklund, Sanofi's head of global policy, said the company decided to use the NHE as a benchmark because it was independent and had some level of predictability. "Single digit is somewhat arbitrary," she said.

And if that inflation rate were to go down? "We're willing to live with wherever it goes," she said.

As far as the rationale goes for new launch prices, Sanofi will have to show why its drug is better than what is already available. Bjorklund gave the example of Dupixent, a drug to treat atopic dermatitis. When the drug launched in March, Sanofi and its partner Regeneron made headlines for setting a price that was lower than expected.

As part of the new price policy, Sanofi began disclosing its average list-price increases. On the whole, Sanofi's list price increased 4% in 2016, but after factoring in discounts and rebates paid to pharma middlemen, the net price decreased by 2.1%.

In part, that's because of its long-acting insulin Lantus, which hasn’t increased in list price since 2014 but has been facing pressures from pharma middlemen.

pulse

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng