Price Increases in U.S. Medical Spending

By Sriparna Roy

(Reuters) – According to a report from the Institute for Clinical and Economic Review (ICER), five of the ten drugs that contributed to the surge in U.S. medical spending in 2023 had price increases not supported by clinical evidence, leading to an additional cost of $815 million.

The ICER noted that while half of the assessed drugs had price hikes justified by new evidence of added benefits or diminished harm, the others did not.

Among these, Johnson & Johnson’s cancer treatment Darzalex rose by 7.6%, resulting in approximately $190 million in U.S. spending. The other drugs with unsupported price increases included Gilead's HIV drug Biktarvy, Novartis's heart medication Entresto, Exelixis's cancer therapy Cabometyx, and Pfizer's rheumatoid arthritis drug Xeljanz. Notably, Biktarvy had the highest impact among these.

ICER's Vice President of Research, Foluso Agboola, expressed concerns over the continuing trend of list price increases surpassing inflation rates for many costly medications. In comparison, last year, eight of the top ten high-expenditure drugs saw significant price hikes totaling $1.27 billion.

Merck's Keytruda, also among the top ten expensive drugs, had a 4.1% increase that was backed by clinical evidence. While some drugs demonstrated new clinical justifications for price hikes, the ICER did not evaluate if these increases were entirely warranted based on benchmarks set by a formal cost-effectiveness analysis.