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.
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&...
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