Pfizer to Raise Drug Prices, Ending Trump-Requested Freeze

Desiree Burns
November 19, 2018

Pfizer said it would raise the list price of most of the drugs by 5 per cent, while prices for three will rise by 3 per cent, and the price of one by 9 per cent, all effective January 15.

Pfizer Inc., the U.S.'s biggest drugmaker, will raise prices on about 10 percent of its pharmaceutical products next year after briefly halting such increases at the request of President Donald Trump earlier this year. "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". The cost of the remaining 90 percent of drugs will not rise. Pfizer said it would raise the list price of most of the drugs by 5 percent, while prices for three will rise by 3 percent, and the price of one other will rise by 9 percent.

The company rolled back a set of price increases in July after Trump said in a tweet that the drugmaker "should be ashamed" and that his administration would respond.

The pharma expects the net effect of the increases on revenue growth to be zero due to higher rebates and discounts that it plans to offer to insurers - an example of how closely linked drug pricing is to opaque negotiation between drugmakers and payers.

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Scottish Secretary David Mundell also pledged his support for May amid what he called the "unprecedented onslaught". She defended her deal as "what's right for the people of this country" and "the national interest".

The Department of Health & Human Services said that its secretary, Alex Azar, and Trump "will continue to take bold action to restructure this broken market".

US officials aren't happy: The move illustrates the "perverse incentives of America's drug pricing system", said a spokeswoman for the Health and Human Services Secretary Alex Azar.

Pfizer's price increases are "not egregious" and may serve as a trial balloon to gauge the administration's response, said David Maris, senior analyst at Wells Fargo Securities.

As spokeswoman on Friday declined to specify which drugs would be subject to the five percent price hike, but The Wall Street Journal in July reported that they included a lung cancer treatment, blood pressure pills and popular pain medication Lyrica. The move comes after Republicans lost the House in last week's midterms - something experts suggest isn't a coincidence.

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