Johnson & Johnson (NYSE:JNJ) is reportedly issuing a report next month that will detail how much it has raised the list prices for its prescription drugs. The report will describe average increases in list prices and the average prices after discounts.
The move comes after some pharmaceutical companies, including Allergan (NYSE:AGN) and Novo Nordisk (NYSE:NVO), have pledged to keep their annual price increases to single-digit percentages. When Allergan published its “social contract” in September, CEO Brent Saunders challenged other companies to limit price increases “before we all face the impact of government regulation that stifles innovation and patient care.”
Health care giant J&J said that 2/3 of its sales growth stems from selling more drugs instead of price hikes, according to the Wall Street Journal. The news outlet also reported that J&J executive Joaquin Duato said the company doesn’t see why it needs to set price limits, since it already keeps price increases to single-digits.
Drug pricing has been at the forefront of public discussion regarding healthcare. The industry’s pricing problems were highlighted in 2015 when Turing Pharmaceuticals raised the price of its malaria drug Daraprim from $13.50 to $750 a pill. This year, Mylan (NSDQ:MYL) has been the poster-child for industry greed for many politicians, after reports showed that the company raised the price of its EpiPen device 500% since it acquired the product in 2007.
Company executives, including Mylan CEO Heather Bresch, have maintained that the overall pricing system isn’t structured for consumer engagement and encourages price hikes.
Bresch has testified before Congress regarding her company’s pricing strategies. In fact, Committees in Congress have issued more than a dozen subpoenas to drug-makers for alleged price-hiking in the last 2 years, with members of the House and Senate collecting hundreds of thousands of documents on pricing strategies and marketing tactics. They’ve put pharmaceutical execs through more than 16 hours of public testimony. But an Associated Press review showed that pressure from Washington has done little to rein in drug prices.
The wire service’s examination of the list prices of 30 brand-name and generic medications showed that most have not budged after enduring federal scrutiny. While list prices for 5 of the drugs fell, prices for 2 of actually increased. More frequently, pressure from Congress did nothing to change the list price.