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Pfizer, AstraZeneca, GlaxoSmithKline (GSK), Bristol Myers Squibb and Sanofi, among others, are some of the drugmakers who are expected to raise the prices of their products from January this year.

As well as Biden’s IRA, the upcoming price increases are also in response to the ongoing cost of living crisis and continuing supply chain issues, which have led to higher manufacturing costs for many medicines.

Following the IRA, the government’s Medicare programme will be able to negotiate drug prices for drugs without competition from 2026. The drugs that have been selected for the 2026 price negotiations will be announced in September 2023.

Antonio Ciaccia, President of 3 Axis Advisors, told Reuters that “drugmakers have to take a harder look at calibrating those launch prices out of the gate… so they don’t box themselves in into the point where in the future, they can’t price increase their way back into profitability.”