Merck & Co. Inc. was the latest pharmaceutical giant to limit drug price increases and the company even rolled back the costs for some of its brands – albeit brands with slowing growth, modest sales and generic competitors – as political pressure continues to mount around prescription medicine pricing in the US.
There has been concern about a populist push against drug pricing since then-President-elect Donald Trump claimed in January 2017 that the pharma industry was "getting away with murder" – but Merck and its peers were slow to change their drug pricing tactics. (Also see " The Ups and Downs Of US Drug Pricing Policy" - Scrip, 21 Mar, 2018.)
Analysts have warned since then that government drug price controls may be coming, but Trump’s blueprint is a mixed bag for pharma, with suggestions for allowing Medicare Part D plans more power to negotiate drug prices, but with more industry-friendly ideas, such as an emphasis on value-based contracting. (Also see "Pricing Positives From Trump Plan Include Potential 340B Changes, Value-Based Contracts" - Pink Sheet, 15 May, 2018.) and (Also see "A US Drug Pricing Rebellion Looms, Analyst Says " - Scrip, 2 May, 2018.)
While Trump promised “massive” price reductions as a result of the blueprint, so far biopharma’s voluntary actions have been muted. The actions to date reflect a careful balance of business impact and public relations. (See below for table tracking pharma’s pricing pledges.)
Allergan PLC was the early leader, announcing a "social contract" in 2016 – before Trump was elected – that limited price increases to less than 10% each year and promised to set drug prices based on the value products add to the health care system. (Also see "Allergan's Price Reform Pledge: Will Others Follow?" - Scrip, 6 Sep, 2016.) CEO Brent Saunders advised his pharma peers after the election that if the industry didn't look for solutions to US drug pricing concerns then the government would impose their own. (Also see "Saunders: Industry Must Act Before We Lose Champions For Innovation In Congress" - Scrip, 20 Jun, 2017.)
Others followed with pricing pledges and annual drug price transparency reports, although some companies were more reluctant than others to publicly change their ways, including Pfizer Inc. The pharma giant found itself called out by Trump on Twitter after Pfizer implemented mid-year price increases, then rescinded the price hikes after CEO Ian Read spoke with the president. (Also see "Pfizer Agrees To Roll Back Prices On 40 Drugs, Yielding To Pressure From Trump" - Scrip, 10 Jul, 2018.) Read later met with Trump on July 19, presumably while he was in Washington, D.C. for the Pharmaceutical Research and Manufacturers of America board meeting.
Trump's blueprint will take a while to produce results, as many of the policies would require congressional action or are only in conceptual stages. In the meantime, the greatest impact on Rx pricing is likely to come from industry itself, and Trump's Twitter bully pulpit.