The prices of two of Celgene Corporation (NASDAQ:CELG)’s cancer drugs have been increased by close to 20% this year. Celgene’s price hikes became effective last week and were made on Pomalyst and Revlimid, two of the pharmaceutical company’s blockbuster drugs.
The two drugs are used in the treatment of multiple myeloma, a rare blood cancer. Revlimid has also been granted approval for the treatment of other kinds of cancers including mantle cell lymphoma, a rare blood cancer.
Price hikes
This is the third time this year that the price of Revlimid is being hiked bringing the price of the drug to $18,546 a bottle. Pomalyst has also had a price hike this year and the cost of a bottle is now $15,833, according to Yatin Suneja, an analyst at SunTrust Robinson Humphrey. In a statement Celgene said the price was dependent on the value of the therapy.
“The values of Celgene medicines continue to increase, supported by the growing clinical and real-world outcomes for patients in the approved indications. Additionally, further benefits may result from our increasing investment in more than 43 potential treatments currently in clinical trials,” read the Celgene statement.
Above inflation rate
Cancer drugs, which have a reputation for being notoriously expensive, are among the therapies that have raised the most concern over high prices. A study conducted by the Journal of Clinical Oncology reported that the rate of increase of the prices of cancer drugs is higher than the annual inflation rate. According to the study the average price increase among cancer drugs was at least 6% per annum.
Last week’s price increases of Celgene’s cancer drugs amounted to about a 9% price hike. According to Suneja, this increase in price should result in the earnings-per-share of Celgene rising by around 8 cents.
These two drugs are also some of the most important products of the company. Pomalyst raked in revenues of approximately $1.3 billion last year while Revlimid raked in close to $7 billion in 2016. In recent years the revenues of both drugs have been rising year-over-year.
On Monday shares of Celgene Corporation rose by 0.86% to close the day at $122.37 a share.
