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Pfizer agrees to defer drug price hikes

(FILES) In this file photo taken on March 18, 2017, a sign for Pfizer pharmaceutical company is seen on a building in Cambridge, Massachusetts. Pfizer reported increased first-quarter profits on May 1, 2018, on slightly higher sales, but results were dented somewhat by a US patent expiration on blockbuster drug Viagra. Net income came in at $3.6 billion, up 14.1 percent. Revenues rose 1.0 percent to $12.9 billion. / AFP PHOTO / DOMINICK REUTERDOMINICK REUTER/AFP/Getty Images
DOMINICK REUTER/AFP/Getty Images

In an unexpected about face, Pfizer Inc. agreed to defer substantial price hikes that went into effect just last week on more than 40 medicines after Ian Read, its chief executive, met with President Trump, who is under increasing pressure to take action to lower the cost of prescription drugs.

The move was announced on Tuesday evening by Trump in a tweet. He said he had talked with Read and Alex Azar, secretary of Health and Human Services, to discuss the “blueprint” for tackling rising drug prices.

“Pfizer is rolling back price hikes, so American patients don’t pay more. We applaud Pfizer for this decision and hope other companies do the same. Great news for the American people,” Trump wrote.

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The Pfizer price hikes, most of which were more than 9 percent, embarrassed Trump and came amid an ongoing push by his administration to find a solution to rising drug prices.

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Pfizer confirmed the move in a brief statement shortly afterward. The drug maker referred to an “extensive discussion” with Trump and explained the deferral is taking place to give him “an opportunity to work on his blueprint to strengthen the health care system and provide more access for patients.”

The company added that prices will return to the levels before the July 1 price hike “as soon as technically possible” and will remain in effect until the Trump blueprint goes into effect or by the end of this year — whichever is sooner. The price drops on five drugs will not change.

The agreement is a bit of egg on the face for Read, but he may accomplish one thing for the moment: remove some of the pressure on the pharmaceutical industry as a whole to cut prices., since Trump appeared to be ratcheting up the pressure on companies.

On May 30, Trump promised that some big drug makers would take “massive” and “voluntary” price cuts in two weeks. But that deadline came and went without any results, underscoring the difficulties in actually lowering prices.

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Although many drug makers traditionally raise prices midyear, Pfizer stood out last week for two reasons — the price hikes were for dozens of drugs and the actual increases were particularly large.

Specifically, the company boosted list, or wholesale, prices on more than 40 medicines; more than 100, if different dosages were counted. Moreover, the vast majority of those increases were more than 9 percent, which greatly exceeds inflation while adhering to an informal and voluntary industry move to keep price hikes below 10 percent.

By contrast, few other large brand-name drug makers took similar steps, since most companies prefer to keep a low profile — and avoid being the subject of Trump tweets — while the White House sorts out its drug-pricing proposal.

There have been some other exceptions, though. Teva Pharmaceuticals boosted prices on more than a half dozen medicines last week by 9 percent. A few weeks ago, Bayer raised list prices for two expensive cancer drugs by 7.9 percent. That followed 5 percent price hikes last December. As a result, prices rose by 13 percent for each drug in half a year.

Ed Silverman can be reached at ed.silverman@statnews.com. Follow him on Twitter @Pharmalot. Follow Stat on Twitter: @statnews.