If at first you don't succeed, raise prices. That appears to be the strategy of Pfizer and GlaxoSmithKline, which have been marking up meds to increase their revenues, according to Thomson data. The two companies boosted wholesale prices by about 9 percent on their 10 best-sellers last year. Without those increases, Pfizer and GSK would have seen their sales drop by more than 10 percent.
These price increases come as both companies brace for generic competition for blockbuster meds. But the strategy could easily backfire; ye olde supply and demand theory says higher prices leads to lower demand. And as we've seen, payers fed up with ever-rising healthcare costs are likely to push back against sticker shock. And price increases tend to get publicity: Consider the AARP's report on brand-name prices. Not to mention calls for re-importation.
ALSO: GSK's chief medical officer is packing his bags. Ron Krall, 60, is retiring, but he won't depart until he's finished helping to identify his successor. Report