AbbVie joined the 10% price-hike pledge on Wednesday, following Allergan and Novo Nordisk, as the drug pricing debate sent biopharma shares reeling once again.
CEO Richard Gonzalez announced at the J.P. Morgan Healthcare Conference that his company, which makes the behemoth anti-inflammatory disease therapy Humira, would raise prices on its products only once in 2017, and then only by single-digit percentages.
The conference has been full of pricing talk, with some pharma execs specifically eschewing price-increase limits—and others outright mocking drugmakers’ moves to keep price hikes under 10%. As some noted, 10% still beats inflation by quite a margin.
“Promising to raise prices no more than 10% and then raising them 9.9% is not the answer,” Regeneron CEO Len Schleifer during his JPM presentation, adding that Regeneron does not raise the prices on its drugs. “A CEO gets up here and says, 'We price to value.' If that's true, why raise the price later that year, the next year? … The value hasn't changed.”
Meanwhile on Wednesday, President-elect Donald Trump shocked the drug industry at his first press conference since July, saying that pharma is “getting away with murder.” Trump promised to not only roll out competitive bidding for drugs but also pressure companies to manufacture their meds in the U.S.
Trump’s move bore out a warning from Allergan CEO Brent Saunders late last year, as many in the industry assumed that the newly elected president would be kinder to pharma than his opponent Hillary Clinton, who’d laid out several proposals for controlling drug prices. Saunders had been the first pharma chief to promise to limit price increases to 10% (and since has rolled out a slate of 9.9% hikes).
“Limit your price increases before we all face the impact of government regulation that stifles innovation and patient care,” Saunders warned in a Forbes op-ed.
Since then, Novo Nordisk’s North America chief, Jakob Riis, wrote a pricing manifesto of his own, pledging to limit price increases on insulin and further help patients who can’t afford their out-of-pocket costs. Like some other pharma executives, Riis also called out the drug supply chain—which routes drug-buying through pharmacy benefits managers, other payers, wholesalers and pharmacies—as a culprit in boosting prices, saying Novo would work with other industry leaders to reform the U.S. pricing system.
But many other drugmakers aren’t following suit. Also at J.P. Morgan on Wednesday, Mylan CEO Heather Bresch said her company isn’t interested in that approach; like Schleifer, she said a 10% limit is not the right answer.