Winning Trump’s praise was easy for Pfizer. Wall Street and the Hill? Not so much

Viagra
Pfizer has raised prices on Viagra and other products despite public pressure to lower drug costs, critics say. (Wikipedia/Tim.Reckmann)

When President Donald Trump praised Pfizer on Twitter for delaying price hikes on 40 of its drugs last week—following a public shaming on Twitter and a private conversation he had with CEO Ian Read—he used the collective “we” to voice his support for the company’s decision. “We applaud Pfizer,” he said, adding, “Great news for the American people!”

But Trump has been largely alone in his praise. The company is now taking heat from Congress and Wall Street analysts alike, not for bowing to the president’s pressure, but for the tepid nature of its response. In a July 10 statement (PDF), Read said Pfizer would merely defer the price increases until the end of the year or until Trump’s blueprint on drug pricing goes into effect—whichever comes first.

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

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Sen. Ron Wyden, D-Ore., called that pledge "long on theatrics and short on real and sustainable relief for patients” last week, as he demanded information on the company’s price increases for the last five years. Monday, Sen. Tammy Baldwin, D-Wis., wrote Read demanding Pfizer make its promise to defer price hikes permanent.

“Instead of playing games with the costs of prescription drugs that millions of Americans depend on, you should make a firm and clear commitment to permanently roll back prices,” Baldwin said in the letter (PDF). The deferral of the price hikes “calls into question your actions to raise prices in the first place,” she added, referring to the FAIR Drug Pricing Act she co-authored, which is designed to increase transparency in drug-pricing decisions.

Baldwin proceeded to demand Pfizer provide details about which drugs would be subject to the price-hike deferral, what the marketing expenses are for those products and why it bumped up prices in January and then planned more increases for July. And in a dig at Pfizer’s windfall from last year’s tax overhaul, Baldwin wondered whether Read would consider dropping Pfizer’s stock-buyback program and combine that cash with proceeds from tax cuts—and use those funds to offset lower drug prices.

A Pfizer spokesperson didn’t immediately respond to a request for comment from FiercePharma. But in last week’s statement, Read said the company’s “highly complex and important work” has generated hundreds of thousands of jobs, and that the company has committed $5 billion toward expanding its U.S. manufacturing operations. “Pfizer shares the president’s concern for patients and commitment to providing affordable access to the medicines they need,” Read said.

Pfizer’s rather public dispute with politicians over drug pricing worries some analysts. On Monday, Raymond James analyst Elliot Wilbur appeared on CNBC and blasted Pfizer for continuing to raise prices despite the public lashing from Trump and others. "It’s simply bad decision-making and terrible policy,” Wilbur said, while calling out Pfizer for raising the price of its erectile dysfunction drug Viagra almost 25% since 2014. "They’re essentially gaining none of the benefits and receiving … all the bad publicity," he said of Pfizer, especially because there are generic versions of Viagra already on the market.

Wilbur is among the large and growing crowd of analysts predicting public shaming from Trump and others could have a major impact on the ability of pharma companies to reap profits by raising prices. “I think companies are going to think twice before … implementing price increases in the 8% to 9% range, which frankly have been on autopilot for many, many years,” Wilbur said on CNBC.

Wells Fargo analyst David Maris sent a note to investors Monday warning “the level of scrutiny from both sides of the aisle is increasing in intensity. We believe the administration’s and other key legislators’ focus is not only on drug pricing, but on the overall supply chain and delivery system, including drug rebating, co-pay coupons, etc.” It was the latest of several warnings from Maris, who believes the drug industry has been underestimating the the extent to which Washington’s scrutiny on the entire drug-supply chain could limit the industry’s pricing power.

RELATED: Price of Pfizer's smoking-cessation drug Chantix doubles in just 5 years: report

Pfizer, of course, is far from the only drug company that's raising prices. Celgene, Roche and Novo Nordisk have also pushed through price hikes on some of their biggest drugs this month. Celgene's cancer drugs Revlimid and Pomalyst, for example, saw price increases of 5%, according to SunTrust. It's just that Pfizer's status as the world's biggest drug company has made it a popular punching bag for Trump and other critics.

Meanwhile, the industry’s trade group, PhRMA, responded to the drug-price brouhaha on Monday by passing the blame to pharmacy benefits managers (PBMs) and other members of the supply chain. In a statement, the group advocated for changing the way PBMs are compensated. Instead of getting a percentage of the list price, PBMs and other players in the supply chain would receive “a fee based on the value their services provide,” according to the statement.

PhRMA also suggested patients should receive discounts on their out-of-pocket spending on drugs via “access to negotiated rebates at the pharmacy,” referring to the discounts that insurers often receive on branded drugs. The group laid out all its suggestions in a response to the Department of Health and Human Service’s request for comments on the Trump administration’s blueprint to lower drug prices. But PhRMA didn’t offer any strategies for how the industry should pass along that share of negotiated rebates to consumers—a seemingly complex plan that would be challenging to implement.

But despite worries that all this back-and-forth over who’s to blame for rising drug prices will negatively affect Big Pharma, it hasn’t had much of an impact yet, according to a new analysis from Bloomberg. On Monday, the news organization rolled out price indexes for 40 widely used drugs to treat cancer, diabetes, autoimmune disorders, respiratory illnesses, multiple sclerosis and HIV. For all those categories, list prices rose faster than inflation, the indexes revealed. Average prices in the autoimmune category—a group that includes the world’s top-selling drug, AbbVie’s Humira—have risen a whopping 40% since June of 2015. That’s when Trump announced his presidential run and started blasting the pharma industry for its pricing practices.