French drug giant Sanofi announced that it would limit its U.S. price increases to the projected growth rate for national health expenditures, an overall health inflation measure the Centers for Medicare and Medicaid Services (CMS) calculates annually. The projected rate for 2017 is 5.4 percent.
That’s considerably lower than the “single-digit” limits that some other drug companies have pledged since the industry came under scrutiny for its pricing practices.
Sanofi also said it would report its aggregate price increases each year, including retail prices and net prices after discounts and rebates to payers. Industry leaders such as Johnson & Johnson and Merck released similar pricing reports earlier this year. For 2016, Sanofi’s average aggregate list prices rose 4 percent, while average aggregate net prices dropped 2.1 percent.
“I believe Sanofi’s pricing principles are another important step in increasing transparency and understanding of the biopharmaceutical ecosystem,” CEO Olivier Brandicourt wrote in an editorial on the company’s website. “I hope they will set a standard for others to follow, to ensure access and affordability for the patients we serve.”
He noted that there could be “a sound reason for a higher increase” in some instances, but promised to provide a rationale in such cases.