1:06 PM
Jul 11, 2018
 |  BC Extra  |  Politics & Policy

Pfizer creates deadline for Trump drug plan

Pfizer Inc. (NYSE:PFE) Chairman and CEO Ian Read has turned President Donald Trump’s fury over drug price increases into an opportunity to create a de facto deadline for the Trump administration to implement its drug pricing blueprint. At the same time, Read seems to have opened the door for pharma companies to negotiate drug prices with the White House.

Read also seized control, at least temporarily, over the industry’s response to the administration’s drug price blueprint by personally negotiating with Trump.

Read’s exchanges with Trump prompted Sen. Ron Wyden (D-Ore.) to question whether the White House was violating legal prohibitions on negotiation of Medicare drug prices.

In a letter to HHS Secretary Alex Azar, Wyden wrote that Azar and Trump had “engaged in negotiations with Pfizer that impacted the list price” of drugs, and that this will affect “future negotiations with Pfizer and Part D plans and pharmacies.”

Wyden accused the Trump administration of trying to “have it both ways” by rejecting proposals to allow government negotiation of Part D drug prices and also “clearly interfering with private drug-pricing negotiations.”

The drama started on May 30, when Trump predicted in a tweet that drug companies would announce “voluntary, massive” price cuts within two weeks.

Coming weeks after Trump’s announcement, Pfizer’s decision to take price increases on multiple products starting on July 1 was “tone deaf” and “infuriating,” a pharma CEO told BioCentury. The CEO did not want to be identified.

In a statement to BioCentury on Monday, Pfizer said, “The list price remains unchanged for the majority of our medicines. Our portfolio includes more than 400 medicines and vaccines; we are modifying prices for approximately 10% of these, including some instances where we’re decreasing the price.”

The price increases included a 4% rise in the wholesale acquisition cost (WAC) of Lyrica pregabalin. Lyrica accounted for 9% of Pfizer’s total revenues in 1Q18. Other Pfizer price hikes were for drugs that have generic competition, such as 9% increases for erectile dysfunction drug Viagra sildenafil and glaucoma drug Xalatan latanoprost.

Trump took note of price increases by other companies in a tweet sent Monday, but focused his ire on Pfizer: “Pfizer & others should be ashamed that they have raised drug prices for no reason. They are merely taking advantage of the poor & other unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe & elsewhere. We will respond!”

In addition to Trump’s tweet, Azar tweeted Monday, “Those who increased prices will be remembered for creating a tipping point in US drug pricing policy. The President’s noticed, I’ve noticed, and more importantly, the American people noticed. Change is coming to drug pricing, whether painful or not for pharmaceutical companies.”

Trump’s and Azar’s tweets caused extreme consternation at PhRMA, industry lobbyists told BioCentury.

Pfizer’s announcement, and Trump’s tweet, made it difficult for Azar to avoid imposing price controls on drug companies, a senior HHS official suggested Tuesday.

Azar sees himself as “standing between the industry and some faster ways to lower prices that some would say are not pro-competition and pro-innovation,” John O’Brien, adviser to the HHS secretary and deputy assistant secretary for health policy, said Tuesday at a meeting convened by the Pew Charitable Trusts.

Pfizer’s price increases “have made it harder to do that,” O’Brien said. He spoke before Pfizer’s decision to defer the price increases was announced.

In a statement released Tuesday evening, Pfizer said that following an “extensive discussion” between Read and Trump, the company had decided to “defer the company’s price increases that were effective on July 1 to give the president an opportunity to work on his blueprint to strengthen the healthcare system and provide more access for patients.” Pfizer said it would return “prices to their pre-July 1 levels as soon as technically possible, and the prices will remain in effect until the earlier of when the president’s blueprint goes into effect or the end of the year - whichever is sooner.”

The comment period for the blueprint ends July 16.

It is not clear how Pfizer or Trump will determine if the blueprint has gone into effect.

Azar has stated that HHS will follow conventional processes for soliciting and responding to public comment before it implements elements in the blueprint. Parts of the plan that involve changes to Medicare Part D and Part B, which could be enacted without legislation, would take more than a year to implement. Some elements of the blueprint require legislation, and there is little chance of Congress enacting laws involving drug pricing this year.

If the blueprint hasn’t been implemented by year end, the deadline provides an opportunity for Read to negotiate terms of an extension of the pricing freeze.

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