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Brightly coloured pharmaceutical medication, including antibiotics, paracetamol, Ibuprofen and cold relief tablets, manufactured by a variety of companies sit in this arranged photograph in London, U.K.

(bloomberg)

(Bloomberg) -- Like a growing number of its peers, Roche Holding AG pledged this week not to raise drug prices for the rest of the year. Thing is, the Swiss company had already done the second of its customary two annual increases.

Roche gave the U.S. government its no-price-rises promise on July 11, the company said in a statement Friday. The health system also needs to focus on “long-term, system-wide solutions that lower costs,” Roche said. “We’re committed to being part of the solution.”

However, Roche had raised the prices of nine medicines in early July by an average of about 3 percent, a spokeswoman told Bloomberg News later Friday by email. This included increases for Roche’s three best-selling drugs, the oncology blockbusters Herceptin, Rituxan and Avastin.

Drug-price data compiled by Bloomberg Intelligence and First Databank show that Roche raised the prices of the nine drugs on July 1, after an earlier increase in January. That’s a pattern Roche has followed for several years, the data show.

The move shows that as drugmakers rush this week to respond to price criticism by President Donald Trump, the devil will be in the details. A series of companies have publicly stepped back from price hikes, including Roche, Merck & Co., Pfizer Inc. and Novartis AG. In many cases, however, the actual impact may be less than consumers might imagine, said Sam Fazeli, an analyst with Bloomberg Intelligence.

“A lot of it is window dressing,” Fazeli said. “It just sounds good.”

For example, Fazeli said, Merck’s hepatitis C treatment Zepatier was already facing competition from a cheaper, shorter-course treatment from AbbVie Inc. Merck said on Thursday it would cut Zepatier’s price by 60 percent as part of a commitment to responsible pricing. But the company probably would already have had to apply a hefty discount to the list price, Fazeli said.

Because Merck’s new policy looks at average prices across its portfolio, it probably also leaves room for increases where the drugmaker would like to make them, Umer Raffat, a New York-based analyst with Evercore ISI, said in a note to investors. The U.S. company said it would cut prices on six specific drugs by 10 percent; those drugs account for less than 0.1 percent of Merck’s sales, Raffat said.

Merck didn’t immediately respond to requests for comment.

In a statement, Roche said its U.S. unit’s annual average net price increase, weighted by sales, has been about 3 percent for the past several years. That’s in line with the medical consumer price index, the company said.

--With assistance from Cynthia Koons.

To contact the reporter on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III

©2018 Bloomberg L.P.

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