Back to the future: With increased scrutiny over price increases, the fundamentals of organic growth in biopharma are more important than ever

Deloitte July 25, 2019
Cameron McClearn, principal, and Tom Yang, principal,

Price increases. This is arguably the most discussed topic in the biopharmaceutical industry today. In January, biopharmaceutical manufacturers raised list prices on more than 250 products.¹ In July, 20 companies increased the list prices for more than 40 prescription drugs by an average of 13 percent.² But are annual price increases a sustainable mechanism for driving future growth in biopharma?

“Eighty percent of the growth in profits in 2015 among the 20 largest drug companies resulted from price increases, rather than from the addition of new products,” according to Robin Feldman, director of the Institute for Innovation Law at UC Hastings.³ However, certain changes in the payer and policy landscape could limit the utility of (or interest in) this once...

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