Pfizer tests Trump with plans to hike prices on 41 drugs
- Pfizer will increase prices on 41 drugs beginning January 15, 2019, signaling a return to historical practice after the pharma agreed to roll back mid-July price hikes in response to political pressure from President Donald Trump.
- Together, the products represent about 10% of Pfizer's portfolio of medicines. Prices will rise by 5% for all but four of the 41 drugs, which were unnamed in a statement released by Pfizer. The Wall Street Journal first reported news of the price increases.
- That Pfizer's raising prices shouldn't come as a surprise. In October, company CEO Ian Read indicated in an earnings call that the company would soon resume "business as normal" when making decisions about pricing. Still, the announcement may provoke a response from a White House that hasn't hesitated to go public with its criticism.
Pfizer's announcement hints at the tenuous status of pharma cooperation with the White House on drug pricing.
In July, half a dozen or so major drugmakers agreed to pause, refrain from or reverse mid-year increases to prices on their products, an olive branch to an administration in the midst of rolling out policies aimed at rising drug costs.
That has set up a potential confrontation come January, when the industry typically rolls out new, higher prices. Such increases are a major part of the industry's business model, particularly for older products no longer bolstered by growing prescription volumes.
Pfizer's return to "business as normal" was signaled by Read's earlier comments, yet it's still not clear exactly how others, such as Novartis or Roche, will move forward.
Come January 15, Pfizer will increase prices on 10% of its drug portfolio
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Pfizer did not disclose which products it planned to increase prices on, but noted that the product earmarked for a 9% bump had recently won U.S. approval for two new uses.
The pharma expects the net effect of the increases on revenue growth to be zero due to higher rebates and discounts that it plans to offer to insurers — an example of how closely linked drug pricing is to opaque negotiation between drugmakers and payers.
"Actions announced today on list prices further illustrate the perverse incentives of America’s drug pricing system," said Health and Human Services spokesperson Caitlin Oakley, in an emailed statement to BioPharma Dive. "Drug companies raising their prices and offsetting them with higher rebates benefits everyone but the consumer, who routinely pays out of pocket based on list price."
Pfizer emphasized that list prices on 90% of its portfolio would remain constant. The number of products included in the planned price increases, however, is roughly the same as the group Pfizer increased prices on in July — only to then walk those increases back after President Donald Trump publicly rebuked the company.
The Trump administration and the pharma industry are already headed for a showdown after the White House rolled out a major policy plan to change how Medicare Part B reimburses for drugs, in part by linking payments to a composite of international prices. While not yet officially proposed, the plan sparked immediate opposition from drugmaker lobby groups, which look likely to fight any initial steps towards implementation.
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