Sanofi commits to limiting price rises for prescription drugs in US

Sanofi CEO Olivier Brandicourt said Tuesday that the company will limit price rises for prescription drugs in the US to 5.4 percent this year, tying increases to the country's national health expenditures (NHE) growth projection. The executive added that in certain instances, Sanofi may "have a sound reason for a higher increase," which in such cases, the drugmaker "will provide information publicly to demonstrate the rationale for any such increase."

Brandicourt called the pharmaceutical value chain in the US "incredibly long and complex," adding that all of those involved have "a part to play in making the system sustainable." The executive said that the company's decision to curb price increases is part of a wider aim to provide "greater transparency around how we make our pricing decisions."

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According to Brandicourt, Sanofi's average aggregate list price increase last year relative to 2015 was 4 percent, while the company's average aggregate net price decreased by 2.1 percent. The executive indicated that the drugmaker will release aggregate price changes annually in the future.

Brandicourt explained that Sanofi's "launch prices are determined after conducting a holistic assessment of value; considering whether similar treatment options are available or anticipated at the time of launch; assessing affordability for patients; and taking further into account any additional unique factors specific to each product." The CEO added "in our view, an objective measure of value considers the benefit to patients, compared to a standard of care; the reduced need – and therefore costs – of other health care interventions; and any increase in quality of life and productivity."

Sanofi's announcement follows similar moves by other drugmakers, with Allergan unveiling a "social contract" last year under which it pledged to limit price increases to no more than one a year with hikes restrained to the single-digit range. AbbVie and Novo Nordisk subsequently announced plans to restrict price increases to less than 10 percent, while Johnson & Johnson released a transparency report in February detailing that the list prices of its drugs in the US increased by an average of 8.5 percent last year.

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