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AbbVie sours on $55B Shire deal after tax changes

FILE - This Friday, July 18, 2014, file photo, shows AbbVie's signature drug Humira, in Houston. Drugmaker Shire wants AbbVie to stick with its roughly $55 billion acquisition bid, and it is reminding its U.S. counterpart of the hefty breakup fee it will receive if things don't work out. (AP Photo/David J. Phillip, File)

Updated at 10:52 a.m.

NEW YORK — AbbVie Inc.’s arthritis drug Humira and Roche Holding AG’s cancer drug Rituxan topped a list of seven treatments whose combined 2017 and 2018 price hikes accounted for a $5.1 billion increase in U.S. spending, a report released on Tuesday showed.

The price hikes were more than twice the rate of medical inflation and were not supported by any new clinical evidence, the Institute for Clinical and Economic Review (ICER) said in the analysis.

It was the first such report by the Boston-based research group, which plans to assess the cost-effectiveness of drugs annually.

Other top treatments by spending that were called out included Pfizer Inc.’s pain drug Lyrica, Gilead Sciences Inc.’s HIV drug Truvada, Amgen Inc.’s cancer drug Neulasta, Eli Lilly & Co.’s erectile dysfunction drug Cialis and Biogen Inc.’s multiple sclerosis treatment Tecfidera.

U.S. drug prices are tough to pin down. Companies may provide list prices, but they also negotiate discounts and after-market rebates with purchasers and their representatives such as pharmacy benefit managers, health insurers, employers and government and state health coverage programs.

ICER evaluated the pricing in partnerships with SSR Health Inc., a research firm, which calculated the increases excluding discounts and after-market rebates.

AbbVie spokeswoman Adelle Infante said that ICER’s data on its net pricing is inaccurate and called into question the group’s methodology.

Roche spokeswoman Emmy Wang said that in pricing drugs, the company seeks the right balance between patient access and investing for breakthroughs in medicine.

AbbVie, Gilead, Biogen, Pfizer and Eli Lilly questioned ICER’s analysis, methodology and conclusions.

with Lilly spokesman Mark Taylor noting that generic versions of Cialis were now available for up to 90% less than the retail price.

Amgen did not have an immediate comment.

ICER acknowledged it was difficult to determine the actual increase in spending on the drugs, but said it was confident that the seven drugs cost a lot more.

Pricing drugs based on new benefits could help slow cost hikes, ICER Chief Medical Officer David Rind said.

“If manufacturers weren’t raising prices if they haven’t shown a new important benefit, I think that would help,” he said.

Celgene’s Revlimid and Gilead’s Genovya were also large contributors to spending but were excluded from the list because of their clinical advancements, ICER said.

Humira’s net price increase over 2017 and 2018 added $1.8 billion in spending while Rituxan added $806 million, the report said.

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