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Despite Criticism, Pfizer Fights Back
In May, the Trump Administration rolled out a “Blue Print To Lower Drug Prices” and the U.S. Department of Health and Human Services published an update on the first 100 days of results. The publication touted 60% fewer brand-drug price increases and 54% more generic and brand-drug price decreases than the same period in 2017. While we are starting to see the pace of price hikes slowing, with Pfizer and other manufacturers rolling out price increases at the start of 2019, we are a long way from seeing substantial price decreases.
Pfizer announced Friday that it would raise the list price on 41 drugs. Prices for all but four of the drugs would increase by 5%, three drugs will increase 3% and one will increase by 9%. The 41 drugs represent 10% of Pfizer’s drug portfolio. In July, Pfizer had agreed to take back its price hikes after President Trump tweeted that the company should be ashamed for raising its prices. The Department of Health and Human Services has not softened its criticism, saying:
Actions announced today on list prices further illustrate the perverse incentives of America’s drug pricing system. Drug companies raising their prices and offsetting them with higher rebates benefits everyone but the consumer, who routinely pays out of pocket based on list price.
Caitlyn Oakley, spokeswoman for the U.S. Department of Health and Human Services
Other manufacturers have also continued to increase their prices. In June and July, the two months following Trump’s blueprint there were 395 price increases but only 24 decreases. The Associated Press reported that although there were fewer price increases this year than comparable periods in the past, over the first seven months of 2018 there were 4412 price increases and only 46 price cuts, a ratio of 96:1. The associated press also found that the median price increase was 5.2% in June and July of 2018, down from 8% in that period in 2017. However the median price cut in June and July also fell to 11%, much smaller than in comparable periods in the past. This suggests that drug companies are protecting themselves against a hostile climate for price increases.
The rate of increases has slowed down, but prices haven’t decreased.
Stephen Schondelmeyer, PharmD, PhD
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