Inflation-Adjusted Prices for U.S. Brand-Name Drugs Declined for Seventh Year in 2024

Inflation-adjusted prices for U.S. brand-name drugs declined for the seventh consecutive year in 2024, marking a significant shift in drug pricing trends. According to recent data, the average list price of brand-name drugs rose by only 2.3% last year, while net prices—adjusted for overall inflation—continued their downward trajectory. This sustained decline is attributed to several factors, including changes in Medicaid rebates, provisions from the Inflation Reduction Act (IRA), and innovative formulary access strategies implemented by pharmaceutical manufacturers.

Eighteen products saw direct list-price reductions as part of efforts to address the “gross-to-net bubble,” a term used to describe the disparity between high list prices and substantial rebates. Other manufacturers have slowed the rate of price increases, contributing to a gradual deflation of this bubble. Additionally, emerging distribution models are reshaping traditional approaches to drug pricing and access. These include smaller pharmacy benefit managers (PBMs), cost-plus pharmacies, patient-paid discount card prescriptions, and direct-to-patient sales channels from manufacturers. While these developments signal change in how patients with insurance may benefit from lower costs, industry experts note that longstanding practices will not disappear overnight.

The evolving landscape reflects broader shifts within the pharmaceutical sector as stakeholders explore new pathways for delivering medications without reliance on inflated pricing structures. Industry observers continue monitoring these trends closely as they reshape dynamics between employers, health plans, PBMs, and patients across the healthcare system.

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Source: GO-AI-ne1

Date: April 4, 2025

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Author

Mark Chiang