AbbVie to keep limits on price hikes next year, denying backtrack
- AbbVie Inc. on Tuesday stressed it would continue to limit price increases on its drugs to single digits next year, after facing growing blowback over reports it was considering backtracking on a pricing pledge made earlier this year.
- Scrutiny of the company ratcheted up this week after a report from Leerink Partners equity analysts, who met with AbbVie management, indicated the drugmaker could decide to return to taking double-digit price hikes in 2018 and beyond.
- In a statement, Abbvie said the comments made by its executives to the analysts had been "incorrectly characterized" and that it would continue to "act responsibly with respect to drug pricing."
As pressure on drugmakers mounted over rising drug costs, several major pharmas made public commitments to limit list price increases to only single-digit hikes taken once per year. While not exactly the picture of restraint, such pledges marked a departure from business as usual, typically twice-a-year increases that frequently crept into double-digits.
Allergan plc, led by Brent Saunders, was the first major drugmaker to stake out a policy centered on limiting price growth — followed by AbbVie, Danish drugmaker Novo Nordisk A/S and, later, Sanofi SA.
At this year's JP Morgan Healthcare conference, AbbVie CEO Richard Gonzalez said the company would stick to single-digit price hikes for 2017, although it was unclear if that policy would extend beyond this year.
The report from Leerink, which emerged last week, seemed to indicate that AbbVie might quietly reverse its stance for 2018, perhaps seeing less political pressure on the issue.
President Donald Trump and Congressional lawmakers had began the year with vocal attacks on the industry, but that agenda appeared to be sidetracked as Republican efforts to repeal and replace the Affordable Care Act floundered.
The drop in anti-pharma rhetoric coming from the White House and Capitol Hill also coincided with fading attention to pricing scandals — such as Turing and Valeant — that once had gripped the attention of Congress and the public.
All of this would have made a U-turn from AbbVie more notable. Big drugmakers, and their trade lobby PhRMA, have made much of their efforts to disassociate themselves with the types of predatory pricing that gives the industry a black mark. A retreat from one of the larger biopharmas would paint the industry in a corner again.
"We evaluate specific pricing decisions on an annual basis, with careful consideration of a variety of factors," AbbVie said in its statement. "For 2018, AbbVie will take one single digit price increase and will continue to act responsibly with respect to drug pricing."
Whether that holds in 2019 remains to be seen.
Editor's note: This article has been updated to clarify the time period for AbbVie's commitment to keep price increases below double digits.
- AbbVie, Inc. Statement
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