Drug pricing 2024 year in review

 

As a non-profit, we at 46brooklyn have made it our goal to provide insights into U.S. drug pricing data available in the public domain based upon the figures we’ve gathered. This month, we plan to talk about December 2024, of course, but also changes we observed in 2024 more broadly. The end of the year is a great time to reflect on what has happened over the last 12 months, and we are no different. Think of this as the Spotify Wrapped equivalence of inventorying last year’s drug pricing changes.

Here at 46brooklyn, we strive to provide informative monthly articles where we reflect on the previous month’s drug pricing trends.  We know that one singular month does not show us a trend, but the cumulative build of month-upon-month of drug pricing data will show a trend over time – and sometimes a very compelling one at that.  Just like if you listened to Christmas music all December but the rest of the year you were singing your heart out to Taylor Swift, we know that one month is not representative of your true taste in music.

2024 was a year of drug pricing firsts.

All in all, 2024 was a year unlike any we had previously seen in our time at 46brooklyn. And so, while this report will focus on what we saw in December 2024 (in keeping with our monthly updates), we’ll also sprinkle in some time to reminisce about what we saw more broadly across 2024. 

Putting a bow on 2024

There were 25 brand drug list price increases in December (as quantified by wholesale acquisition cost, or WAC, data), with price changes impacting on the low end, $113k (Caldolor solution for injection) of gross prior year Medicaid expenditures (PYME) up to $262 million (Zenpep) on the much higher end. In December, no medications took a price decrease, which is down from even the November data where only two medications took a price decrease. As we know, WAC price changes can affect rebates; therefore if the WAC of a brand medication goes down, so too does the rebates and discounts that the drug manufacturer offers as well.

Some of the biggest and/or most interesting movers to take note of for December 2024 were:

·      Afrezza inhalation powder (5% increase; $16 million PYME) for diabetes

·      Orserdu oral tablet (7.5% increase; $35 million PYME) for cancer

·      Envarsus XR oral tablet, extended release (1.7% increase; $65 million PYME) for kidney transplants

·      Myfembree oral tablet (7.0% increase; $36 million PYME) for endometriosis

·      Orgovyx oral tablet (3.0% increase; $17 million PYME) for cancer

·      Zenpep oral capsule (3.0% increase; $262 million PYME) for pancreatic insufficiency

Although the percentage increase wasn’t high (1.7%), the dollar amount for Envarsus XR oral tablet came in at a $65 million increase in PYME, whereas, on the other hand, a 9.9% increase for Gimoti nasal spray only resulted in $318k in PYME. Therefore, it is important to note that sometimes a small percentage increase – especially for an already expensive brand medication – can result in a significant chunk of change in gross drug expenditures. Bear in mind that as you read those numbers, that they are the prices before drugmaker rebates, which as we know are growing significantly over time and are at their largest amounts in the Medicaid and 340B programs.

In September and November, brand name medications that increased in cost were seasonal medications such as vaccinations, cough, cold, flu, and weight loss. However, in December we do not see a trend from the Brand Drug List Price Change Box Score for seasonal type product increases like we have the last couple of months.

On the generic side of the coin, year-over-year (YoY) generic oral solid cost deflation (per NADAC) is at 6.9%.

It can be hard to know what changes will occur from one month to the next in the drug channel, but as the holidays are now behind us, make sure to come back next month as summarize what is often the most interesting month of the year – January. For a sneak peak at early price changes in 2025, see good coverage from Reuters, NPR, Pharmacy Times, Wall Street Journal, and Fierce Pharma.

Brand Name Medications

1. A small number of list price increases for brand drugs in December

There were a total of 25 brand-name medications that saw wholesale acquisition cost (WAC) price increases in December, which is featured and contextualized in our Brand Drug List Price Change Box Score.

Price changes this month ranged from +0.5% to +15% of the prior WAC.  As a reminder, brand price increases in Medicaid are largely held in check thanks to the Medicaid Drug Rebate Program (MDRP), which includes rebate penalties for drug price increases that occur faster then the rate of inflation. This policy extends to 340B covered entities as well.

This is one of a number of reasons that solely analyzing brand list price changes provides an incomplete picture of what’s really happening with brand manufacturer economics, thanks to the growing lot of opaque rebates, discounts, and giveaways that drugmakers shave off those list prices. But alas, until PBMs, insurers, wholesalers, 340B covered entities, and rebate aggregators make more granular data on net prices public, we’ll continue working with what we’ve got.

2024 in review

We ended 2024 with a net 1,360 WAC price increases. This put last year solidly in the middle, in terms of annual number of brand WAC changes, over the last five years. As can be seen below from our box score (Figure 1), 2024 (the orange line) had around 80 fewer WAC price increases than 2023 (red) or 2022 (light blue), but had about 200 more than 2021 (green) and about 400 more than 2020 (yellow).

Figure 1
Source: Elsevier Gold Standard Drug Database, 46brooklyn Research

2. Brand drug list price trends over time

To help contextualize brand name drug list price increase behavior, we find it beneficial to review past trends.  In comparison to the data from prior months of December, this year seems to be decently close to December 2023, which had 11 (combined increases and decreases) branded price changes.  Looking at past trends overall, December is a month where there have been consistently a small number of branded price changes.

The highest number occurred 12 years ago in December 2013 with 114 net branded price increases, whereas the lowest was in December 2023 when there were only 11 price increases.

To put it into a more recent perspective (over the last five years) in December 2024, there were a net (combined increases and decreases) of 25 medications, 11 in December 2023, 25 in December 2022, 25 for December 2021, and 17 in December 2020.

2024 in review

We ended 2024 with a median WAC increase on brand name drugs of 4.5% (the lowest level we have seen at the end of a year within the box score). At the same time, we also saw that on a weighted basis, using Medicaid drug utilization data, we saw a weighted WAC price change of 1.4%, which is also the lowest we have observed to date (Figure 2).

While this year, our approach to weighting received some criticism (due to some of the uniqueness of largely unprecedented price drops of medications that had previously enjoyed a high degree of utilization in Medicaid programs), we did not change our methods in calculating the weighting (as no one was complaining about it in any prior years of running the dashboard). It seemed, at least to us, that perhaps people were struggling with the idea that brand price changes could be significantly lower if the more heavily-utilized brands took price decreases. It is true, as demonstrated by the median, that most brands are still increasing their WAC price by about 5% annually; however, the drugs that we develop and launch today are generally not as used as brands developed in the past (i.e., insulin sees more use then Myfembree).

3. Brand drug list price changes worth taking note of in December

We identify drugs worth taking note of in a couple different ways. Primarily, we look for medications with a lot of prior Medicaid expenditures. We next look for drugs with large pricing changes (+/- 10%). And finally, we look for drugs that are interesting for us either because we’ve previously written on them or because we find them of unique clinical value. This past month, when looking for these drugs in the brand arena, we have several of each worth mentioning:

  • Afrezza inhalation powder (insulin human) is a rapid acting inhaled human insulin indicated to improve glycemic control in adult patients with diabetes mellitus. This medication took an increase in WAC of 5%, impacting $16 million in gross prior year Medicaid expenditures (PYME). Prior to Afrezza, there was another inhaled insulin by the name of Exubera from the pharmaceutical giant Pfizer. Exubera was discontinued due to poor uptake, even though the medication in 2007 made $12 million in worldwide sales, which was far behind the $2 billion that was projected. Afrezza has had it its share of struggles getting market traction too.

  • ENVARSUS XR extended-release tablets (tacrolimus ER) is a calcineurin-inhibitor immunosuppressant indicated to help prevent organ rejection in people undergoing certain types of organ transplants. This medication experienced an increase in WAC by 1.7%, impacting $65 million in gross PYME.

  • Myfembree tablets (relugolix, estradiol, and norethindrone acetate) is a combination of relugolix (a gonadotropin-releasing hormone (GnRH) receptor antagonist), estradiol (an estrogen), and norethindrone acetate (a progestin), indicated in premenopausal women for the management of heavy menstrual bleeding associated with uterine leiomyomas (fibroids) as well as the management of moderate to severe pain associated with endometriosis. Notably, this medication had a 7.0% increase in WAC, impacting $36 million in gross PYME.

  • Orserdu tablets (elacestrant) is an estrogen receptor antagonist indicated for the treatment of certain types of breast cancer. This medication experienced an increase in WAC of 7.5%, impacting $35 million in gross PYME.

  • ORGOVYX tablets (relugolix) is a gonadotropin-releasing hormone (GnRH) receptor antagonist indicated for the treatment of adult patients with advanced prostate cancer. This medication had an increase in WAC of 3.0%, imapcting $17 million in gross PYME.

  • Zenpep delayed-release capsules (pancrelipase) is indicated for the treatment of exocrine pancreatic insufficiency in adult and pediatric patients. This medication had a 3.0% increase in WAC impacting $262 million increase in gross PYME.

    2024

    The biggest brand name drug list price changes in 2024 were the following medications (nearly all of which were for diabetes):

    • Biktarvy (bictegravir sodium, emtricitabine, and tenofovir alafenamide fumarate tablet) is a medication used in the treatment of HIV. Since its launch, a range of clinical trials have demonstrated the value that Biktarvy treatment can have including in those with prior treatment failure. These findings, combined with its general tolerability, has undoubtedly helped this medication gain market share relative to other, older HIV treatments (there are those of us that remember recommending its coverage on P&T committees when first launched). This medication took a WAC price increase of 4.9% (above the median and weighted average for 2024), impacting $6 billion in gross PYME.

    • Trulicity (dulaglutide) is a medication used to treat Type 2 diabetes. As one of the GLP-1 agonist drugs, it’s part of a class of medications that made a lot of headlines in 2024 (another GLP-1 appears in our list). This medication took a 5% WAC price increase (above the median and weighted average for 2024), impacting approximately $5.6 billion in gross PYME.

    • Jardiance (empagliflozin) is a medication used to treat Type 2 diabetes as well and is used to reduce the risk of death and hospitalization in people with heart failure and chronic kidney disease. The latter indications are relatively newer, and probably help explain why the medication has seemed to gain market share relative to other diabetic therapies. Jardiance was one of the 10 medications selected by Medicare for price negotiation (which takes effect in 2026). This medication took a 3% WAC price increase in 2024 (below the median, but above the weighted average for 2024), impacting approximately $3.6 billion in gross PYME.

    • Ozempic (semaglutide) is a medication used to treat Type 2 diabetes (and in other brand names, to help with weight loss). We already talked about GLP-1s above. This medication took a 3.5% WAC price increase in 2024 (below the median, but above the weighted average for 2024), impacting approximately $3.6 billion in gross PYME.

    • Insulins (various) are medications used to treat diabetes. The poster children of gross-to-net drug pricing shenanigans over the years (including an investigation by the Senate Finance Committee), these medications saw a 70%+ WAC decrease at the very end of 2023/beginning of 2024. Note that approximately $9.5 billion in gross PYME spending was associated with all brand WAC price decreases in 2024. We highlight the insulins, as they represent around $6 billion of this $9.5 billion figure. That is not to say that others are not deserving of recognition, but our reports are already long enough.

As a reminder, these are just the drugs that we found to be of most interest. Thanks to our Elsevier, CMS, and our crack team of drug pricing nerds, you can view all of last year’s changes and compare them to prior years on our Brand Drug List Price Change Box Score.

Generic Medications

4. An unfavorable, unweighted price change picture in December

Each month, we look at how many generic drugs went up and down in the latest month’s survey of retail pharmacy acquisition costs (based on National Average Drug Acquisition Cost, NADAC) and compare that to the prior month (Figure 3). Basically, the quick way to read Figure 3 is to look for blue bars that are taller than orange bars to the left of the dotted line, and exactly the opposite to the right of the dotted line. That would indicate a good month – more generic drugs going down in price compared to the prior month, and less drug prices going up.

Figure 3
Source: Data.Medicaid.gov, 46brooklyn Research

As can be seen in Figure 3, many more drugs increased in cost this month compared to the prior month.

When you look at the bar graph on the left side, you can see that the blue bars outweigh the orange bars (with an exception for the 0-10% decrease bar). For every generic drug that decreased in price this month, 4.5 increased in price.

One of the issues with our generic cost measuring this month is that CMS changed the methods of calculating generic NADACs in December 2024. As stated with the NADAC Methodology document (which was updated in December 2024):

“Beginning with the December 2024 monthly rate updates, CMS will implement a temporary, short-term measure to address rate volatility occurring as a result of fluctuations in survey participation. Specifically, monthly NADAC rates for generic drugs will be calculated using a three-month moving average. The three-month moving average will utilize the individual calculated monthly average acquisition costs, as described above, from the most recent three months. The three-month moving average will only apply to generic drugs. CMS is adopting a three-month moving average in order to moderate monthly rate volatility while also ensuring that rates remain responsive to change in market conditions. The use of the three-month moving average for generic drugs will continue until further notice. To address the volatility on a more permanent basis, CMS plans to solicit stakeholder input regarding the NADAC methodology”

In some ways, the rest of our comparisons may not be entirely fair, as the methods for NADAC have changed, but we roll with it like we did earlier this year. For more on the NADAC ups and downs that are driving CMS’ move to engage in some short-term smoothing, you’ll need to dig back through our monthly reports from May, July, and November.

But as usual, take this unweighted price change analysis with a grain of salt. To really make heads or tails of all of these pricing changes, let’s weight these changes.

5. Weighted, Medicaid generic drug cost comes in at $286 million inflation in December

The purpose of our NADAC Change Packed Bubble Chart (Figure 4) is to apply utilization (drug mix) to each month’s NADAC price changes to better assess the impact. We use Medicaid’s last year annual drug mix from CMS to arrive at an estimate of the total dollar impact of the latest NADAC pricing update. This helps quantify what should be the real effect of those price changes from a payer’s perspective (in our case Medicaid; individual results will vary).

The green bubbles on the right of the Bubble Chart viz (screenshot below in Figure 4) are the generic drugs that experienced a price decline (i.e. got cheaper) in the latest NADAC survey, while the yellow/orange/red bubbles on the left are those drugs that experienced a price increase. The size of each bubble represents the dollar impact of the drug on state Medicaid programs, based on utilization of the drugs in the most recent trailing 12-month period (i.e. bigger bubbles represent more spending). Stated differently, we simply multiply the latest survey price changes by aggregate drug utilization in Medicaid over the past full year, add up all the bubbles, and get the total inflation/deflation impact of the survey changes.

Figure 4
Source: Data.Medicaid.gov, 46brooklyn Research

Overall, in December, there was $309 million worth of inflationary drugs, with a small offset of $23 million of deflationary generic drugs, netting out to approximately $286 million of generic drug cost inflation for Medicaid. 

These numbers are the exact opposite from last month’s report on November changes where we saw $560 million in deflation and $25 million worth of inflationary drugs, netting out to approximately $535 million of generic drug cost deflation for Medicaid.  

The month-over-month increase bubble chart is GIGANTIC compared to its month-over-month decrease counterpart, which is exactly the opposite of last month’s report.  So, for the month of December, the generic drug price increases went up substantially coming in around $309 million compared to just last month in November where we only saw about $25 million.

6. Year-over-year generic oral solid deflation hits 6.9%

Ever since June 2020, we have been tracking year-over-year generic deflation for all generic drugs that have a NADAC price. We once again weight all price changes using Medicaid’s drug utilization data. This month, deflation on oral solid generics and all generics YoY was at 6.9% and 9.0%, respectively (Figure 5).

Figure 5
Source: Data.Medicaid.gov, 46brooklyn Research

Again, compared to a year ago, generic drug costs are roughly 10% lower. We estimate, based upon the generic drug market in Medicaid, this NADAC deflation resulted in approximately $6 billion in savings (i.e., if NADAC didn’t publish any new price updates from December 2023 forward, we would have overspent quite significantly in Medicaid). Note, we can’t know fully what would have happened with subjective PBM generic pricing benchmarks (i.e. maximum allowable cost) or other generic drugs without NADAC value, we’re just estimating based upon the swings that did occur, but take this number with a semi-grain of salt.

7. Notable generic cost decreases from December

For December, the drug price decrease and increase bubbles were opposite of one another with the increase bubble being substantially larger.  After reviewing the various sizes and colors that compromise these month-over-month changes, there are some notable decreases.

There are not a lot of generic drug price decreases this month, but there are some that are more interesting than others. Some of the biggest decreases include seizure medication(s), a first generation antipsychotic, and a muscle relaxant.

Two of the largest outliers in the packed bubble chart are the seizure medications carbamazepine 200mg tablet, which shows the cost decreasing by -39.9% and phenytoin sodium extended release 100mg capsule by -23.6%. Just last month, phenytoin sodium 100mg capsules had a 53.1% increase, so with this month’s decrease, this medication actually has a net increase of 29.5%.

Fluphenazine (a repeat offender here at 46brooklyn) 10mg tablet took a decrease by -16.5% and is a much older first generation antipsychotic that has found an alternative use to include the treatment of tics.  Several pharmaceutical companies including Upsher-Smith, Alembic Pharma, and Glenmark Pharmaceuticals have received FDA approval to make fluphenazine tablets within the last couple years, as the medication has reported annual sales of around $18-30 million depending on which report you read.  Oddly enough, the medication has also been in the news for race horses testing positive for fluphenazine, as it has been found that the medication can be used to calm nervous horses, but it comes with a suspension and monetary fine for a trainer. There are 64 different witty ivermectin jokes waiting to be had here, but we’ll leave it be.

Baclofen is a skeletal muscle relaxant typically used in patients with multiple sclerosis (MS) to treat spasticity; however, many patients end up discontinuing the medication with the first year of use according to a Swedish study.  The high discontinuation rate may potentially be a reason for the decrease in the cost of this medication or it could be a coincidence. Several branded products of various dosage forms baclofen have popped up within the last several years, including Lyvispah, Ozobax, and Fleqsuvy.

8. Notable generic cost increases from December

On the increase side of things, the most impactful increases of 50% or above were methylphenidate ER (CD) 20mg capsules (62.9% increase) and methylphenidate CD 20mg capsules (62.9% increase), dextroamphetamine-amphetamine 7.5mg tablet (57.3% increase), loteprednol etabonate 0.5% eye drop (58.5% increase), and butalbital-aspirin-caffeine 50-325-40mg capsule (59.7%).

December’s data shows exactly what we have been seeing the last several months in regard to ADHD medication pricing — a fluctuation. ADHD medication prices continue to go up and down without a rhyme or reason — or is there?  A new study has recently come out and shown that methylphenidate is safe to use in pregnancy.  The study shows that methylphenidate was not associated with a significant increase in congenital anomalies or miscarriages compared with unexposed pregnancies among women with ADHD or those from the general population.  Another study from WVU is also showing that that time-release ADHD medication keeps adults on track and lowers substance use risk. As a reminder, ADHD medications continue to be in a reoccurring drug shortage situation these last few years. 

Loteprednol etabonate 0.5% is a steroid eye drop used to treat inflammatory conditions as well as postoperative inflammation and pain. This medication increased by 58.5%, which is quite interesting, as last month, the same eye drop had decreased by -62.3%. 

Butalbital-aspirin-caffeine 50-325-40mg capsule — also known as BAC — is a medication used to treat headaches but also has the potential for abuse and misuse, as this medication can be habit-forming.  This medication increased by 59.7%.

That’s a wrap for December and 2024 at large. Come back next month to see which medications come in hot (or record breaking cold if you live in the Midwest) when it comes to drug pricing as we kickstart 2025 by keeping it real here at 46brooklyn.

Shout out to Adam Fein at Drug Channels for referencing our list price tracking with his double-shot of net pricing context in his annual review of the gross-to-net bubble.

While more nuance is always needed in evaluating drug pricing realities, media coverage on January brand drug list price changes has generally improved over the years. Certainly better than a decade ago. Credit to Pete Grieve at Money.com, Sydney Lupkin at NPR, Ashley Gallagher at Pharmacy Times, Jared Hopkins at Wall Street Journal, and Kevin Dunleavy at Fierce Pharma for plucking through our dashboards and pulling out the relevant insights.

Thanks to Ed Silverman at STAT News and Marissa Plescia at MedCity News for including our thoughts in their respective pieces on the FTC’s second interim report on PBMs that highlighted the bloated markups on specialty drugs.

And kudos to Katie Thomas at the New York Times on her solid look at the topsy-turvy world of 340B, where manufacturer price decreases actually increase the underlying acquisition costs of many medicines purchased through the program. Another good reminder that in a system where there are those who derive value off the inflated prices of medicines, it stands to reason that when list prices come down, those who rely on those inflated prices take a hit.

Lastly, special call-out to the big PBMs and their attorneys for seeking all communications between your 46brooklyn crew and the FTC related to agency’s PBM endeavors. While you ultimately got denied in your infatuated pursuit of our day-to-day, the honor you bestowed on us made our parents so proud, and for that, we salute you. Next shot of Malört is on us.

 
Ben LinkMedicaid, Brand drugs, List prices, WAC, Afrezza, Orserdu, Envarsus, Orgovyx, Zenpep, Carbamazepine, phenytoin, Fluphenazine, Baclofen, Methylphenidate, loteprednol