CEO Sidesteps Big Pharma’s Pricing Practices; Pushes Proposals That Would Boost Drug Company Profits and Incentivize Price Hikes
During a recent interview on Bloomberg’s “Balance of Power,” Pfizer CEO Albert Bourla claimed the pharmaceutical industry is willing to be a helpful partner in reducing “significantly the cost of medicines.”
What Bourla did not mention in the interview, was the policies supported by Pfizer and Big Pharma would boost the profits of brand name drug companies and provide the industry even greater incentive to repeatedly hike prices.
Bourla also failed to mention that it is Big Pharma’s egregious pricing practices and anti-competitive tactics that have created a crisis of prescription drug affordability. In fact, Pfizer has been one of the most prolific Big Pharma giants in continuing to hike prescription drug prices while Americans grappled with economic and health implications of the COVID-19 pandemic.
Pfizer increased prices on more than 130 drugs in the company’s portfolio in January 2021, including 20 price hikes of five percent or greater. These included drugs for serious conditions, like the company’s cancer drug Ibrance which has experienced five percent price hikes for three consecutive years. Pfizer also hiked drug prices more than 125 times in 2020.
The company has also repeatedly pledged to its investors to profiteer off its COVID-19 vaccine as soon as the pandemic wanes. During a fourth quarter earnings call this February, Pfizer CFO, Frank D’Amelio, told analysts that Pfizer was “obviously… going to get more on price” for the company’s COVID-19 vaccine and was only limited currently due to the “pandemic pricing environment.” D’Amelio also said there would be “significant opportunity” to boost margins on the vaccine “once we get beyond the pandemic environment that we’re in.”
D’Amelio followed this up at the Barclays Global Healthcare Conference in March by doubling down and telling analysts that the company sees “a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine. So clearly, more to come here. But we think as this shifts from pandemic to endemic, we think there’s an opportunity here for us.”
During the Bloomberg interview last week, Bourla did not mention specific proposals the company supports, however during an earnings call earlier this year Bourla outlined priority policy proposals, including “rebate reform” and “capping beneficiary cost-sharing in Medicare Part D.”
Big Pharma’s push for “rebate reform,” manifested on the federal level in a misguided Trump administration policy called the Rebate Rule, would directly line the pockets of brand name drug companies with boosted revenues — while increasing premiums on Medicare Part D beneficiaries, costing taxpayers an estimated $200 billion and doing nothing to lower drug prices. So who stands to gain from the Rebate Rule? Big Pharma companies like Pfizer who will bank higher profits and gain more pricing power with the only current downward force on price eliminated.
Another of the policies raised by Bourla is capping out-of-pocket (OOP) costs, or cost-sharing, for Medicare Part D beneficiaries. American seniors need relief and out-of-pocket costs should be capped, but that must be combined with solutions that disincentivize and prevent Big Pharma from hiking prices at egregious rates with taxpayers picking up the tab.
If OOP costs are capped without accompanying reforms to hold Big Pharma accountable, brand name drug companies will have every incentive to rampantly increase already out-of-control drug prices to boost profits on the backs of American taxpayers. That is why redesign of the Part D program must include solutions to end taxpayer subsidies for price hikes that outpace the rate of inflation and give Big Pharma skin in the game, with significant cost-sharing liability during the catastrophic phase of coverage.
To truly tackle the crisis of prescription drug affordability and lower prices for the American people, policymakers must pass solutions to hold Big Pharma accountable for the industry’s egregious pricing and anti-competitive practices.
Read more on Pfizer’s pledge to investors to hike COVID-19 vaccine prices HERE.
Read more on the pharmaceutical industry’s self-serving policy proposals HERE.
Read more on the misguided Rebate Rule and why it’s the wrong medicine for Rx prices HERE.
Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.