Allergan CEO Brent Saunders drove a stake in the ground last week with his promise to cap drug price increases as part of a “social contract” with patients. On Sunday, the pharma followed up with a full-page ad in The New York Times.
Industry watchers noted their approval--private pharma investor Brad Loncar posted a snap of Allergan’s Sunday Times ad on Twitter--and media pundits applauded the move as a much-needed transparency pledge for the pharma industry.
Allergan took out a full-page ad in the Times today. I do like how Brent Saunders included his Twitter handle. pic.twitter.com/NhSZJRNrRj— Brad Loncar (@bradloncar) September 11, 2016
But what about Allergan peer pharma companies? Saunders encouraged them to “take a look in the mirror and examine the practices they’re taking in this arena,” in an interview with CNBC on Thursday. Will they follow Allergan’s lead?
So far, only a few industry leaders have addressed Saunders' pledge publicly, although Saunders told CNBC on Thursday that he has received “very encouraging feedback” from peer and smaller company CEOs.
Last week, FiercePharmaMarketing reached out to half a dozen of the largest big pharma companies, asking if they were considering following Allergan’s lead--and received two responses.
Eli Lilly quickly shot back with a statement. “We have not had specific conversations regarding Allergan’s pledge," the company said via email, "but the more the industry can self-regulate itself on the cost of medicines, the better we can then discuss the tremendous value these medicines bring to patients and the healthcare system.”
GlaxoSmithKline, which has a stated strategy of pursuing sales via volume, rather than price, also weighed in. “GSK's goal is to ensure that we are working in the best interest of both our patients and shareholders," the company wrote, "pricing in a way that rewards the inherent risk of pharmaceutical R&D while also ensuring broad access and affordability to our medicines.”
GSK also pointed to its specific practices, noting that all 6 of its most recently launched drugs were priced the same or less than the competition. And overall, “from 2010 to 2015, our net prices increased only 1.7%, and in respiratory only 0.5%, on average annually. And during that time, net prices for some of our most popular medicines, such as Advair, actually decreased,” read the statement.
Since then, a few smaller company CEOs have spoken out, often to plead the industry's usual case. A group of biotech chiefs including Acorda Therapeutics CEO Ron Cohen--who's industry president of BIO this year--and Alnylam's John Maraganore penned a piece for Forbes to point out the difference between companies that discover important new treatments and those that take advantage of price hikes on long-sold meds. Echoing Mylan's "middlemen" argument, they also called for pricing transparency from the distributors, payers and others between drugmakers and patients.
Jeremy Levin, former chief exec at Teva and now CEO of the biotech Ovid Pharmaceuticals, signed that Forbes piece, but he also wrote an op-ed for BioCentury to address the EpiPen scandal, the Allergan social contract, and executive compensation to boot.
"Today, we continue to raise prices incorrectly and inappropriately in a fashion that is dislocated from value," Levin wrote, going on to say that "the problem needs action on multiple fronts."
One of those, to Levin, would be revamping executive pay to emphasize innovation rather than earnings targets. Mylan has caught plenty of flak for its outsized executive pay packages since the EpiPen price hikes triggered controversy, with some market-watchers pointing out that the company's pay structure gave CEO Heather Bresch a powerful incentive to pump up sales by whatever means necessary.
As for other pharma companies, with Congress demanding specific answers on price increases from Mylan on EpiPen and individual politicians promising to take on drug pricing in a big way, they may not be able to stay silent for much longer.
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