Sanofi pledges to keep price hikes below healthcare inflation rate: 4 things to know

Paris-based Sanofi is the latest drugmaker vowing to limit U.S. drug price hikes, reports Financial Times.

Here are four things to know.

1. Sanofi CEO Olivier Brandicourt on Tuesday said the company will ensure price hikes are at or below the national health expenditures growth projection — a figure calculated by HHS that incorporates total spending from all U.S. payers to measure healthcare inflation, according to Reuters.

2. By this benchmark, Sanofi will limit price hikes to about 5.4 percent in 2017, according to Financial Times. If Sanofi believes there is a "sound reason for a higher increase," it will share its rationale for the price hike, Mr. Brandicourt said in a statement.

3. The drugmaker also promised to disclose gross and net drug price increases in the U.S., according to the report. Sanofi said its average aggregate list prices increased 4 percent in 2016, while net prices dropped 2.1 percent compared to the year prior.

4. Sanofi's price hike pledge highlights a growing trend in the pharmaceutical industry. In September 2016, Allergan's CEO Brent Saunders introduced a "social contract" with customers, promising to limit price hikes on prescription drugs. Novo Nordisk became the second major drugmaker vowing to limit price increases when CEO Jakob Riis promised not to boost the list price of its drugs by more than a single-digit percentage annually.

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