Pfizer CEO calls Clinton drug plan 'very negative for innovation'

Ian Read

Democratic presidential candidate Hillary Clinton has unveiled new proposals to tackle drug price increases, suggesting that a panel identify “excessive, outlier” price hikes and take action against culprit pharmas. While the candidate hopes it will strike a positive note with voters, it has drawn a sour response from the CEO from the world's largest drugmaker, Pfizer's ($PFE) Ian Read.  

Clinton issued the proposal in response to pricing scandals from Turing and then Mylan ($MYL). While such an idea is not likely to get far in Congress, Read said it “will be very negative for innovation,” according to a transcript of his remarks at the Wells Fargo Healthcare Conference. He said he believes “the Clinton approach to healthcare drives you to a one-payer system, it drives you to rationing, drives you to a place where most consumers don’t want to be.” 

Earlier this month, Clinton said if elected, she would call on a panel--composed of governmental agency representatives and advised by other stakeholders--to scour for “outlier” hikes. Enforcement actions against such hikes could include fines on offending drugmakers, emergency importation of newly pricey products, and measures aimed at increasing competition.

Shortly following the announcement, Evercore ISI policy analyst Terry Haines wrote that the “‘citizen panel’ is not something that would survive a bipartisan legislative process.”

“Anything like this would require Congress to create it, not Clinton to decree it,” Haines wrote in a note. “There certainly will be no action on drug pricing in any form, including this one, before mid to late 2017, and only then as part of broader ACA reform.”

That last point was echoed by Read this week, who said he also believes that much of any potential drug pricing overhaul is likely to happen in the context of a reworking of the Affordable Care Act. He added that a lot will be determined by the composition of Congress and who wins the presidency.

“I think there is going to be a movement in this to increase overall transparency and to get a more efficient market-based system,” Read said.

Clinton's new proposals add to her broader plan to tackle sky-high drug costs. The candidate wants to end DTC advertising subsidies, promote more R&D from companies that benefit from taxpayer money, cap out-of-pocket costs for patients and allow Medicare to directly negotiate drug prices, among other policies.

Medicare price negotiations could have presidential support no matter who wins the Oval Office, as Republican Donald Trump previously crossed a party line to endorse the cost-cutting measure.

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