President Donald Trump promised he would take on Pfizer. And now he’s claiming a big victory over Big Pharma price hikes.
Pfizer $PFE, you may recall, deeply embarrassed the president recently when the company hiked its prices on a range of products — after Trump had claimed that drug prices would soon be falling dramatically.
Now Trump says he’s been in direct contact with Ian Read — along with HHS Secretary Alex Azar — and the Pfizer CEO has backed down, agreeing to delay the hikes by some months.
Just talked with Pfizer CEO and @SecAzar on our drug pricing blueprint. Pfizer is rolling back price hikes, so American patients don’t pay more. We applaud Pfizer for this decision and hope other companies do the same. Great news for the American people!
— Donald J. Trump (@realDonaldTrump) July 10, 2018
Pfizer is backing it up, saying that it will defer any price increases that went into effect at the beginning of the month until the end of this year or until the president’s drug pricing blueprint goes into effect – whichever is sooner. It plans to roll back prices as soon as it can — and any price cuts it instituted will remain in effect.
That marks a dramatic turnaround for Read, who has repeatedly said he’ll do what he feels is right for Pfizer when it comes to raising drug prices on the portfolio — a routine industry practice. Now the big question is whether other biopharmas pushing through price hikes – like Celgene – will follow Pfizer’s lead or risk a call from the president.
Pfizer’s Ian Read has a tendency to underestimate political risk:
2018 – drug prices / Trump
2016 – Allergan tax inversion / Obama
2014 – AstraZeneca deal / UK gov’t $PFE
— David Crow (@bydavidcrow) July 11, 2018
The Financial Times first reported that Pfizer had hiked prices on 100 products at right around 9% for most, fitting under a 10% cap that most manufacturers are happy to comply with.
Pfizer, though, isn’t the only big company raising prices. We’ll see if Trump can keep a lid on the rest of the drug prices out there, and just how far his reach can extend. In the meantime, Read says Pfizer will rely on innovation to create the value it needs — something that has eluded the company for some years now.
“The most fundamental way the biopharmaceutical industry creates value is by discovering innovative medicines that help people live longer, healthier, more productive lives,” Read said in a statement. “We have entered an exciting new era with scientific advances that will result in future breakthroughs and cures. This highly complex and important work also generates hundreds of thousands of highly skilled jobs across the U.S. Furthermore we have recently committed $5 billion of capital to expand our manufacturing in the U.S. We are encouraged that the President recognizes the value our industry brings to society and our ability to fulfill our mission to discover and bring innovative new medicines to patients.”
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