Pfizer Inc. CEO Ian Read has agreed to claw back price increases on 40 drugs after a phone conversation with President Donald Trump July 10, in what represents an extraordinary move by a big pharma to yield to pressure from the US president. Pfizer's decision to roll back the recent price increases comes a day after the president publicly shamed Pfizer on Twitter for increasing drug prices.
"Following an extensive discussion with President Trump today, Pfizer's Chairman and CEO Ian Read announced that it will defer the company's price increases that were effective on July 1 to give the president an opportunity to work on his blueprint to strengthen the health care system and provide more access to patients," the company said in a statement.
Pfizer will return the prices to their pre-July 1 levels as soon as possible, and they will remain steady until the end of the year – or until the president's blueprint goes into effect, the company said. At the same time, Pfizer said the price decreases it took on five drugs would remain in effect.
President Trump took to Twitter to praise Pfizer's decision. "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!" The president had previously tweeted that "massive" price reductions were coming soon in response to the blueprint, but there have been no announcements yet, apart from Pfizer's rescinding of price increases and the five decreases. (Also see "Big Pharma Voluntary List Price Reductions Doubtful, Sen. Warren Says" - Scrip, 13 Jun, 2018.)
US Department of Health and Human Services (HHS) Secretary Alex Azar also issued a statement, calling the move a step in the right direction and a win for American patients. "I commend Pfizer for its constrictive and professional approach, and its desire to work with President Trump to be part of the solution and not part of the problem," Azar said.
Pfizer's decision to reverse the price increases is surprising to some extent as Read has been a steady proponent of the industry's pricing practices and has not typically cowed to pressure. At the same time, the July 1 price increases represented the second round of price increases Pfizer has taken in 2018, at a time when public backlash over the high cost of drugs is intensifying.
Pfizer was reportedly one of only four companies that took a second round of price increases thus far in 2018, according to research by Morgan Stanley analysts. The other three were smaller companies: Acorda Therapeutics Inc., DepoMed Inc. and Novo Nordisk AS.
Pfizer's decision to roll back the prices on the 40 portfolio drugs could be mostly optics in the face of public shaming, but the action also raises the question of whether or not Pfizer received some assurance from President Trump in return about the implementation of the drug pricing blueprint. For example, drug manufacturers would like to see steps taken to reign in the cut pharmacy benefit managers and other partners in the distribution chain take out of the cost of drugs.There has been congressional interest in the role of PBMs and wholesalers. (Also see "US Senators Seek 'Clarity’ On Middlemen Obstructing List Price Reductions" - Pink Sheet, 4 Jul, 2018.)
Read, who has never been shy about defending Pfizer's pricing strategy publicly, said in a statement, "Pfizer shares the president's concerns for patients and commitment to providing affordable access to the medicines they need."
He also took the opportunity to reiterate that the drug industry generates hundreds of thousands of highly skilled jobs in the US, and pointed out that Pfizer has committed to reinvest $5bn in capital to expand manufacturing in the US.
"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."