Pharma has long been considered one of the few industries that is “recession-proof,” buckling less under economic downturns and pressures compared to others.
However, a survey released this week found that it’s not entirely immune to macroeconomic headwinds.
The survey, conducted between October and November, asked industry professionals what regulatory and macroeconomic trends would have the biggest impact on pharma in the coming year.
Inflation — which the average American has likely felt most sharply as it relates to groceries, gas and rent prices — was cited by 40% of respondents as the number one challenge for pharma.
Amid inflation, the pharma industry will likely continue to face increasing operational costs, fierce competition and patent expirations, the survey noted. Additionally, inflation can disrupt pharma manufacturing and supply chains.
The survey also highlighted increased regulation over the past year on drug prices as a main factor that industry professionals believe will hinder pharma growth, though that’s an oft-debated point.
The passage of the Inflation Reduction Act in 2022 included historic drug pricing measures that allow Medicare to negotiate the prices of certain expensive drugs. While pharma industry groups have often argued drug pricing restrictions will dampen innovation, advocates for lowering drug prices say it isn’t enough to make a dent in pharma success.
In addition, pharma’s annual drug price hikes — which take place every January — saw a 5% increase in list prices this year so far, remaining below the national consumer inflation rate of about 7% in 2022.
That drug price rise is a bit lower than hikes in recent years, suggesting that the pharma industry isn’t yet seeking to compensate for a new Inflation Reduction Act rule that took effect on January 1. That rule now requires drugmakers to pay rebates on specific Medicare Part B drugs if their prices jump faster than the rate of inflation.Still, more than 1,800 drugs saw their list prices increase this month, including 8% increases on Pfizer cancer drugs Ibrance and Xalkori. GSK’s lupus drug Benlysta will also see a nearly 8% list price increase this year.