Sanofi Says Average Net Price of Its Drugs Fell Last Year

By Jonathan D. Rockoff 

French drug company Sanofi SA says the average price of its medicines fell 8.4% in the U.S. last year after accounting for rebates, the latest example of pharmaceutical pricing pressures.

Several major drug companies have now said the net prices of their medicines -- that is, the price of the drugs after discounts and rebates -- fell in aggregate in 2017. Johnson & Johnson and Merck & Co. have said the sums paid for their drugs had dropped last year, too.

Meantime, Eli Lilly & Co. said the average net prices paid for its medicines rose 6% last year after discounts and rebates, which the company said had increased to 51% of the list price.

Such disclosures of the aggregate pricing data are aimed at deflecting criticism of drug prices, showing that the companies aren't price gouging or responsible for the rising co-pays and other out-of-pocket costs many patients are coping with.

Overall, the list prices of many drug continue to rise. Public attention to the high cost of drugs has prompted pharmaceutical companies like Allergan PLC to pledge to limit their annual list-price increases to less than 10%. Likewise, Sanofi had vowed to keep annual list-price increases in the U.S. at or below the federal government's projections of yearly health-care spending growth.

The company says, in a pricing report posted to its website last month, it had tweaked the pledge, promising to aim to limit increases to that estimated inflation rate and explaining the rationale for any increases above it.

Sanofi has faced criticism from health insurers over the price increases for some of its products like Lantus insulin, though much of the increases went to such middlemen as drug-benefit managers.

The Paris-based company was also criticized for originally listing Praluent, a new kind of cholesterol drug sold with Regeneron Pharmaceuticals Inc., at $14,600 a year. Earlier this year, the companies said they would offer discounts bringing the annual price down to as low as $4,500.

In 2017, Sanofi says it raised the average list prices of its medicines by 1.6%. The year before, Sanofi upped the list prices of its drugs by 4% but net prices fell 2.1%.

Sanofi's net-price decline last year reflected the company's efforts to rebate its medicines enough so health plans would be willing to place the drugs on a lower formulary tier, which meant patients would have lower co-pays, a company spokeswoman said Friday.

"But despite this we know many patients still struggle to afford their medicines and we are committed to doing our part to make our medicines affordable and accessible," the spokeswoman added.

Last year, Sanofi reported EUR35 billion in total net sales, up 5.6% from a year earlier.

Write to Jonathan D. Rockoff at [e-mail]

(END) Dow Jones Newswires

June 01, 2018 15:11 ET (19:11 GMT)

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