What would a world with no drug rebates look like? Pfizer’s Ian Read is already imagining it.
“I would believe we're going to go to a marketplace where we don't have rebates,” he said Tuesday on Pfizer’s second-quarter conference call, noting that such a marketplace “will be very beneficial” to companies “who are launching new products over the next five years or so.”
Pfizer certainly counts itself in that camp. Without what Read referred to as the “rebate trap”—whereby “access is denied to innovative products because of a strong position of another product with its rebates”—its biosimilars could see stronger uptake. Products such as Xeljanz, which Read says has been hurt by rebates from “bigger competitors,” could benefit, too.
The U.S. Office of Management and Budget is currently reviewing a proposed rule from the Trump administration that would remove protections to drug-company rebates, though the rule wouldn’t apply to private payers. Read, though, seems to be thinking further down the line.
“I don't know the speed of that, but I do believe the administration has been focused” on nixing rebates altogether,” he told analysts.
For now, though, analysts have warned that rule changes may not be so black and white for pharma. The new rules “may not be very simple, and predicting response to any change is equally challenging,” Evercore ISI analyst Josh Schimmer pointed out in a recent note to clients.
The proposed rule is one piece of the administration’s longtime pledge to fight escalating drug prices, a promise the president most recently renewed in a tweet directed at Pfizer itself. In it, he criticized the company’s recent price hikes with a vow that “We will respond!”—a move that spurred the New York drugmaker to reverse the hikes, at least for the time being.