The cost of newly-launched pharmaceuticals in the United States soared in 2024. Median annual list prices of US drug prices more than doubled compared to 2021. A Reuters analysis highlights that this sharp increase is attributed mainly to companies leveraging significant scientific advancements. This has developed more treatments for rare diseases, which traditionally command high prices.
The median annual list price for a new drug reached over $370,000 in 2024. This is based on a survey of 45 newly marketed medicines. It contrasts starkly with the $180,000 median price for 30 drugs launched by mid-July 2021. A study published in JAMA used similar criteria. The upward trend has been consistent. US drug prices saw median launch prices hit $222,000 in 2022 and $300,000 in 2023.
This escalation in pharmaceutical costs persists despite the US government's active efforts to curb US drug prices. Drug pricing remains a contentious issue. Figures like President Donald Trump advocate for US prices to align with other high-income nations, where costs are considerably lower.
Experts suggest the trend of increasing prices shows no immediate signs of abating. This will persist at least until breakthroughs occur in reducing the cost of developing new therapies.
The decoding of the human genome, completed in 2003, has been instrumental in paving the way for a better understanding of the genetic and biological foundations of rare diseases. It also fuels medical advancements. Drugmakers receive incentives, including extended market exclusivity periods. This encourages investment in research for these conditions, partially due to the limited potential sales volume.
Industry Perspective and Market Realities
The Pharmaceutical Research and Manufacturers of America (PhRMA), a leading industry trade group, cautioned against focusing solely on list prices for rare disease drugs. They state it "misses the broader context of how these drugs contribute to overall US drug prices, healthcare costs and value to patients."
Despite the high individual prices, Boston Consulting Group projected peak annual sales of the 2024 cohort of drug launches at $60 billion (£47 billion). This figure is significantly lower than past averages. This is primarily due to the absence of "mega-blockbusters" – drugs that generate annual sales exceeding $10 billion (£7.8 billion).
In 2024, the US Food and Drug Administration (FDA) approved 57 novel drugs. These include seven new cell and gene therapies. This compares to 55 drug approvals and 17 new biologics in 2023. The Reuters survey encompassed 45 of these new drugs. It excludes imaging agents, vaccines, intermittently used drugs like antibacterials, and products not yet commercially launched.
Notable High-Priced Therapies
Several new treatments exemplify the high-cost trend:
- Miplyffa, from Zevra Therapeutics, for Niemann-Pick disease type C (an inherited metabolic disorder affecting roughly 900 people in the US), carries an annual price tag of over $1 million (£785,000).
- Lenmeldy, Orchard Therapeutics' gene therapy for a rare inherited disorder impacting the brain and nervous system, launched with a record-breaking price of $4.25 million (£3.33 million) for a one-time treatment.
- Conversely, Pfizer's haemophilia gene therapy, Beqvez, priced at $3.5 million (£2.75 million) in 2024, was withdrawn from the market less than a year later due to weak demand.
Pharmaceutical companies maintain that these new medicines offer significant value. They potentially reduce emergency room visits and hospital stays. In some cases, like gene editing therapies, they offer the possibility of a cure. Companies also emphasise that they do not dictate the final cost borne by patients. This cost is influenced by health insurance plans, discounts, and rebates negotiated with insurers. This is mainly when competing treatments are available. Many drugmakers also offer savings programmes to mitigate out-of-pocket expenses. This has significant implications for US drug prices.