Pfizer CEO psychs up investors for a rebate-free world under Trump

Pfizer CEO Ian Read
Pfizer CEO Ian Read said Tuesday that he thinks abolishing rebates would help the company's biosimilars portfolio. (Pfizer)

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.

Free Daily Newsletter

Like this story? Subscribe to FiercePharma!

Biopharma is a fast-growing world where big ideas come along daily. Our subscribers rely on FiercePharma as their must-read source for the latest news, analysis and data on drugs and the companies that make them. Sign up today to get pharma news and updates delivered to your inbox and read on the go.

RELATED: Spooked AbbVie investors are selling off shares—but do they need to be?

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.

RELATED: Trump blasts Pfizer price hikes, pledges a governmental response

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.