For Prescription Drug Makers, Price Increases Drive Revenue - (The Wall Street Journal via NewsPoints Desk)

  • Many drugmakers have succeeded in increasing revenue on products despite flat or declining demand by consistently raising prices, The Wall Street Journal reported Tuesday.
  • Sales of Biogen's multiple sclerosis drug Avonex doubled over the past 10 years to $2 billion, despite falling demand for the drug each year, due to an average price increase of 16 percent annually over the period.
  • An analysis revealed that revenue for the top 30 products in the US surged by 61 percent over the past five years, three times the increase in the number of prescriptions sold over that period, while a report by Credit Suisse previously illustrated that 80 percent of the growth in net profit for the top 20 drugmakers was attributable to price hikes.
  • "Pricing has covered up a multitude of other disappointments over the past 15 years" in the pharmaceutical sector, explained AllianceBernstein analyst Geoffrey Porges.
  • Meanwhile, Pharmaceutical Research and Manufacturers of America spokesman Robert Zirkelbach noted that prices of all drugs will decline after they lose patent protection.
  • "Over the past two decades, which is the life of Avonex, we've done more than any other company to improve the treatment of multiple sclerosis," remarked Biogen senior vice president Daniel McIntyre, adding "the reality is that revenues from therapies available today make this possible."

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