Pfizer's Read suggests need for better transparency on pricing
- Pfizer CEO Ian Read pinned some of the responsibly for problems with high drug prices on the broader healthcare system, saying "consumers can't understand the pricing of pharmaceuticals," during a Wells Fargo investor conference on Thursday.
- Read went on to explain that the function of pharmacy benefit managers (PBMs) and intermediaries was to facilitate rebates, but has shifted in recent years and is not resulting in lower costs for patients.
- Calling the current climate the "perfect storm," the CEO said the pricing debate is likely to play out over the next eight to nine months and it will be up to all parties — pharmaceutical companies, hospitals, insurers and PBMs — to show the value they are providing to consumers.
Read is toeing the industry line with his statements about pricing. Since the debate about high drug prices hit a crescendo in fall of 2015, industry executives and industry groups like BIO and PhRMA have been deflecting responsibility for high prices.
"The rebates are acquired to ensure you have a position on formulary, that you can get access for your future patients for your product, and ideally those rebates are going back to lowering the co-pays. That's not was happening. The rebates are being paid, and the co-pays are going up," said Read during the conference.
Read went on to say that he doesn't believe rebates are the answer, but also doesn't believe in a one-payer system like those used in Europe where the government controls prices. The exec was more in favor of transparency in healthcare.
"A private system where you individually have enough transparency and understand your healthcare policy, so that you can make choices on what type of drug coverage, what type of health coverage you want and what's your skill in the game on accountability, your health, your exercise, a more transparent market based system. So that's where I think you get better value for your money," he said.
Even as recently as last week, PhRMA made comments about pricing, pointing to the high cost for pharmaceutical companies to create innovative drugs. Industry groups have been sending the message that high drug prices are necessary for discovering cures.
There has been plenty of backlash to this type of talk from the industry. Executives were criticized after making similar comments at the J.P. Morgan Healthcare Conference earlier this year.
More recently, Mylan CEO Heather Bresch drew ire after making the same points during an appearance on CNBC when confronted about the high price increases for the EpiPen.
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