Pfizer Drug Pricing Will Return to "Business as Normal" in 2019

On an earnings call earlier this week, Pfizer CEO Ian Read said that the company will be returning to “business as normal” on its drug pricing in January, after having agreed to hold off on price increases earlier this year following pressure from the Trump administration.
Samantha DiGrande
November 01, 2018
On an earnings call earlier this week, Pfizer CEO Ian Read said that the company will be returning to “business as normal” on its drug pricing in January, after having agreed to hold off on price increases earlier this year following pressure from the Trump administration.

Drug pricing has been a key issue in the political arena leading up to the midterm elections next week. President Trump, together with HHS Secretary Alex Azar, have narrowed their focus to lowering drug prices for American patients through numerous actions and efforts, some of which were outlined in the American Patients First blueprint.

To underscore the efforts to address drug prices, Trump began to put pressure on pharmaceutical companies individually. Following a conversation between Read and Trump in July, Pfizer announced that it would hold off on a planned price increase. Pfizer was not the only company to halt price hikes; around the same time, Merck, Novartis, and Roche also agreed to hit pause on price increases for the rest of 2018.

“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!” tweeted Trump at the time.

However, on the latest earnings call, Read signaled that the agreement to hold off on price hikes would end at the end of 2018, at which point the company will return to pricing based on the market. “We price to the marketplace, we price competitively,” said Read.

Of note, the administration is not relying solely on voluntary actions from pharmaceutical companies to lower drug prices. Last week, Trump unveiled a new plan that aims to reduce Medicare’s costs for prescription drugs where CMS could set its prices for some drugs, including biologics, based on the prices paid in other nations. 

The plan was met with mixed responses from industry stakeholders. CMS is currently taking comments on the pricing model until Monday, December 31, 2018, after which it plans to issue a proposed rule in spring 2019.
 

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