Contextualizing Drug Prices (Again)

As we have discussed at length at 46brooklyn, U.S. brand drug prices are less of a specific value and more of a spectrum or range of pricing experience due our disparate and opaque system of rebating value back to PBMs and government programs. The top end of that pricing range is the list price set by the drug manufacturer.

When we last checked in, we were highlighting the first of the year changes in the list prices of existing brand medicines. While we're in the process of reviewing and evaluating how January wrapped up compared to prior years, we worked with the Wall Street Journal to dig into the data at month's end to provide some high-level takeaways.

While January of every year has a heightened awareness around brand drug list price increases (and regrettably, a lesser awareness of what is happening underneath those list prices), this year had a special degree of interest due to the recent passage of the Inflation Reduction Act (IRA) and its possible impact on list price activity.

While it may still be too early to tell how the IRA will impact marketplace behavior, one of the generally agreed upon beliefs by policy experts and market analysts is that the IRA's new rebate penalties for drugmakers who raise their prices beyond rates of inflation will result in increased pressure for brand manufacturers to juice their prices even higher when entering the market.

The issue of launch prices has already been an area of interest for us. We previously did a deep dive on launch prices three years ago when we noticed that an undue focus on brand drug list price increases year-over-year was potentially missing the broader point that the alternative for manufacturers to taking list price increases each year would be to simply set a list price high out of the gate and never change it – or to not be as reliant on price increases over time.

This launch price territory has been traversed in different ways by others recently, including Reuters, Harvard researchers, the Congressional Budget Office (CBO), and more recently, Rep. Katie Porter. With the growing attention on launch prices, we were aware that we hadn’t updated our old launch price dashboard in some time; so we set out to re-launch the dashboard and offer some additional data-driven context to launch prices as they have been experienced over the last 10 years, particularly in relation to our ongoing work and commitment to on monitoring drug price increases in our Brand Drug List Price Change Box Score.

So in an effort to examine and contextualize prior launch price activity and to look ahead at future in a post-IRA world, we have been collaborating with the Wall Street Journal on a deep dive into evolving launch price dynamics. You can check out the takeaways from WSJ's Peter Loftus here. You can check out our insights on the data here.

But don't just take his word or our word for it.

Today, we are releasing the data findings on launch price trends with a multitude of ways for you to "choose your own adventure" by toggling through different views and framing options. With that, we are pleased to give you our new and improved 46brooklyn Drug Launch Price Contextualizer.

As you navigate through the new dashboard, it is worth noting that its variety of options and its more intricate design may leave you wondering how to make sense of the data. Further, even if you figure out how to use it, you may be left wondering, what does it all mean? We highly recommend navigating through our latest drug pricing report for a spin through the tool, its uses, its limitations, and what us nerds at 46brooklyn see in the data – and how it fits into broader discussions around prescription drug affordability and policy reforms.

We are in the process up updating and refreshing a number of our dashboards at 46brooklyn over the next few weeks, and we're even going to be integrating new drug pricing data into our tools. But we're a small team, with an ocean to boil. If you're interested in supporting our work to bridge the gap between misunderstanding and understanding of prescription drug pricing, you can join our movement here.