Pfizer yesterday put a freeze on planned price increases for about three dozen drugs after President Donald Trump finger-wag tweeted Monday that it — and others — “should be ashamed” for “taking advantage of the poor” by raising prices “for no reason.” That decision — which followed an ensuing discussion between Trump, Health and Human Services Secretary Alex Azar and Pfizer CEO Ian Read — in turn earned the New York-based company a slap-on-the-back tweet from the president last evening.
“Trump campaigned in 2016 on lowering the price of prescription drugs. He made his first move toward that end in early May when he released a … blueprint during a speech in the Rose Garden of the White House,” NPR’s Giles Snyder reminds us.
“Pfizer, which hiked prices … on July 1, said it will give the administration more time to work on its plan to overhaul the pharmaceutical supply chain. The prices will revert to what they were before July 1 ‘as soon as technically possible,’ according to Pfizer. The new prices will remain in place until the end of the year or until Trump's plan goes into effect, whichever is sooner, the company said,” write CNN Money’s Danielle Wiener-Bronner and Tami Luhby.
“The president's plan to lower drug prices … seeks to increase competition among drug companies, have better government negotiations with pharmaceutical representatives, and to create incentives that would reduce patients’ costs,” explains Dennis Romero for NBC News. “Critics, however, say the Trump administration is ignoring obvious leverage, mainly the prospect of using Medicare and its customer base of roughly 60 million to negotiate directly with the big pharmaceutical firms.”
Pfizer’s rollback yesterday “is particularly striking because … Read has been one of the staunchest defenders of the pharmaceutical industry's right to take reasonable price increases,” observes Forbes’ Matthew Herper. “He likes to point to an economic analysis that shows that cholesterol drugs like Lipitor, which his company manufactured, generated $1.3 trillion in societal gains between 1987 and 2008 by preventing heart attacks and strokes, while costing only $305 billion in total.”
But Pfizer’s “move is likely to have a modest direct impact on its profits. Middlemen like drug wholesalers and pharmacy-benefit managers will feel a bigger effect. The medicines in question comprise only a small fraction of Pfizer’s total revenue, which reached nearly $13 billion in the first quarter. And any impact is likely to be temporary,” points out Charley Grant for the Wall Street Journal.
“The fact remains that a pharmaceutical giant and highly influential force in Washington is pausing planned price increases after pressure from the president. That’s rare in this industry, for which raising prices has become a major source of earnings growth,” Grant continues.
“David Mitchell, the founder of Patients for Affordable Drugs, a nonprofit advocacy group, applauded the move, but said it was just a start,” reports Robert Pear for the New York Times.
“President Trump took Pfizer to the woodshed, and that’s good,” Mitchell said. “There are other companies that have also increased prices in recent months that could also use a whupping. But one-off trips to the woodshed do not fix the systemic problems we have with drug prices.”
Pfizer, as we mentioned Monday, contributed $1 million to the Trump inauguration. It was the top patron of the festivities among nine other healthcare companies.
“Pfizer’s $1 million donation entitled it to four tickets to a ‘leadership luncheon’ with ‘select Cabinet appointees and House and Senate leadership,’ according to a solicitation brochure obtained and posted online by the Center for Public Integrity,” write Jay Hancock, Sydney Lupkin and Elizabeth Lucas for Kaiser Health News.
Pfizer executives no doubt feel more at home at leadership luncheons than in woodsheds.