U.S. drug pricing pressures rise amid policy shifts, P&R delays

Delays in monetizing approved drugs, driven by complex pricing and reimbursement processes, have become one of the pharmaceutical industry's top challenges of the year, a GlobalData analysis finds.

Responses from a survey pulled from GlobalData's State of the Biopharmaceutical Industry report show that industry professionals rank pricing and reimbursement (P&R) processes among the top five factors affecting the sector.

Revenue delays for approved drugs due to P&R have an average impact of 3.7 out of 5 on revenue generation, ranking just below top emerging industry trends like AI, immuno-oncology, rising clinical trial complexity and costs and precision medicine, according to the survey conducted last fall.

But in terms of expected negative impact for the year ahead, P&R constraints ranked third next to U.S. policy shifts and trade pressures.

Actions by the Trump administration and escalating trade wars and tariffs were identified as the two leading concerns, each selected by 36% of survey respondents, compared with 22% who pointed to P&R delays as the biggest threat to their business this year.

"These top three regulatory and macroeconomic price trends, when [sic] are expected to have a negative impact on the industry, all affect pharmaceutical prices," Milena Izmirlieva, senior director and head of health economics and market access research and analysis at GlobalData, said in the company's press release.

Just behind P&R constraints in the negative impact rankings, four of the five trends cited by respondents were also tied to drug pricing, including inflation, the U.S. Inflation Reduction Act (IRA), the Most Favored Nation policy (MFN) and international reference pricing (IRP), Izmirlieva added.

These intensifying pressures in the U.S. could trigger unintended consequences in other countries, especially as more than 75 countries rely on the IRP for pricing control, Izmirlieva warned.

The MFN policy, signed by President Trump last year, relies on the IRP for lower prescription drug costs, but if a high-income country benchmarks against the lowest prices in lower-GDP markets, it could "produce a very negative impact on access to medicines, due to delayed or cancelled product launches," Izmirlieva continued.

It can also drive up costs in some reference countries, potentially discouraging price transparency, Izmirlieva noted.

"The negative impact of the U.S. MFN plans, if implemented as currently envisaged, will have negative repercussions around the world and would not necessarily result in savings for U.S. patients," Izmirlieva said in the release.

Meanwhile, price negotiations under the IRA could hit the industry faster than other policies, yet respondents ranked them fifth in terms of potential negative impact.

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.