Amid a Republican push to repeal and replace Obamacare, Pfizer CEO Ian Read took his drug pricing message to the Washington press corps Thursday, refuting the idea that pharma is out to gouge patients while observing that drug costs can't be borne by patients alone.
In his hour-long appearance, Read said Pfizer understands its “responsibility to produce medicines that bring significant value and are competitively priced.” But, he said, there are flaws in current U.S. healthcare system, among them the fact that insurance plans are shifting many pharmaceutical costs to patients.
“Individuals cannot afford modern pharmaceuticals,” he said, arguing that it has to be up to a shared-risk approach where drugmakers aren't the only ones on the hook to provide access. Pfizer gave away 1.7 million prescriptions last year “as a last resort because the insurance system is failing” those patients, Read said.
The conversation at the National Press Club comes as pharma faces potential pricing action from Congress and in the wake of multiple high-profile controversies that have kept a bright spotlight on the issue for more than a year. Most recently, Marathon Pharma attached an $89,000 price tag to a decades-old steroid newly approved in Duchenne muscular disorder, leading to a quick backlash. The company ultimately "paused" the launch and sold the drug.
While reserving comment on the pending healthcare proposal in Washington, Read said an overhaul to the system should strive to “get the incentives right.” In one example, he said, risks and rewards could be lodged with healthcare providers such as hospitals rather than with payers, because patients relocate less often than they change insurance plans.
Right now, he said, healthcare incentives center on short-term budget considerations rather than on the long-term savings potential of groundbreaking medicines. It's a point that execs at Gilead repeatedly made in defense of their costly hep C drugs Sovaldi and Harvoni, arguing that long-term care for the disease is far more expensive than a one-time cure.
Read isn't alone in advocating for more focus on value. Top drugmakers Merck, Novartis, Amgen and others have each signed on to pay-for-performance deals with payers for their respective diabetes, heart failure and cholesterol drugs.
Such deals are among the strategies pharma has adopted as wave after wave of pricing scrutiny has swept over the industry since mid-2015. President Donald Trump, riding his populist message to the White House, has repeatedly taken pharma to task over high prices.
Trump and others have pledged to address high U.S. drug costs through a variety of measures. The president himself has called for more “competition," including competitive bidding, and legislation pending in Congress proposes allowing cheaper drugs to be imported from other countries and granting direct price-negotiating power to Medicare.
Read advised officials against any sort of pharmaceutical price controls, calling them a “blunt instrument” used by governments that stifle innovation and choice.
Previously, after then-President-elect Trump called for more “bidding” in the industry, Read said Trump likely “hasn’t been briefed” on the industry and its competitive purchasing. At the time, Read said outliers in the pharma industry have done a great deal to mar the industry's reputation, while "ethical" drugmakers such as his own price responsibly and seek to recover R&D costs.