Pfizer, which became the center of a drug pricing controversy this summer featuring President Donald Trump, has decided it’s ready to raise prices in early 2019.
In a Friday afternoon post, the drugmaker disclosed that in January, it is raising list prices on 37 drugs by 5%, one drug by 9% and three drugs by 3%. Together, the 41 drugs growing in price represent about a tenth of the company’s portfolio. The company didn't disclose which drugs are getting price increases.
The hikes follow Pfizer’s move this summer to raise prices on roughly the same number of medicines. The news caught the attention of President Donald Trump, who tweeted that the drugmaker “should be ashamed” and pledged a response from the government. Later, Trump and HHS secretary Alex Azar spoke with Pfizer CEO Ian Read, and the company agreed to delay its price hikes.
More recently, Read said on the company’s third-quarter conference call Pfizer is ready for a return to “business as normal” on pricing in 2019, indicating that increases are in its future. Pfizer says the increases come as rebates and discounts to middlemen continue to grow. In 2018, the company predicts pricing will be down 1% compared with last year.
But even with the advance notice from Read, the increases may come as somewhat of a surprise for industry watchers as pharma continues to face heavy scrutiny on its pricing. For several years, lawmakers and others have blasted routine price hikes from pharma companies, and during that time, new increases have only stirred up more controversy.
For its part, the drug industry has sought to turn attention to the complicated supply chain and the growing rebates and discounts pharmaceutical companies pay to secure coverage. Patients don’t benefit from rebates, so they’re increasingly exposed to high list prices.
Read took to that messaging again in his company’s post, saying the “best means to address affordability of medicines is to reduce the growing out-of-pocket costs that consumers are facing due to high deductibles and co-insurance and ensure that patients receive the benefit of rebates at the pharmacy counter.”
The company timed its pricing disclosure to meet a 60-day notice required by a transparency law in California, a source told the Wall Street Journal.
As the discussion plays out, the Trump administration is pushing to fight high prices with some of its own efforts, such as an FDA initiative to boost generic approvals and HHS’ move to force drug prices in TV ads.
The administration is also working to lower Medicare Part B prices closer to international levels and weighing other initiatives unveiled in its May drug pricing blueprint. The administration wants to boost competition and negotiations in the drug markets, lower list prices and lower out-of-pocket costs.