Professor Brook K. Baker
Northeastern U. School of Law
Senior Policy Analyst Health GAP
In a staged play designed to give cover both to President Trump and Big Pharma, Pfizer has announced a temporary roll back of its extortionate price hikes on 41 medicines averaging nearly 9% over and above its existing monopoly prices. A scene-by-scene recap reveals the cozy, mutually beneficial farce that Trump and Pfizer are enacting.
Scene One: Drug companies like Pfizer use their patent and data-protection monopolies to set prices at whatever the market will bear, with U.S. purchasers paying nearly twice as much as is paid in countries with more rational approaches to trying to prevent abusive pricing.
Scene Two: In his first news conference as President-elect in January 2017, Trump claims drug companies are getting away with murder. Although drug stocks prices initially drop, this scene is dominated by a ten-month period of silence by Trump while drug companies continue to raise drug prices on the backstage.
Scene Three: In October 2017, Trump reiterates that drug companies are getting away with murder, but shifts the focus from Big Pharma price gouging to foreign countries that are allegedly paying too little for medicines thereby forcing the US to pay higher prices to subsidize research and development of new medicines.
Scene Four: After another seven months of silence, on May 2018 the President trumpeteers his “bold” Blueprint for controlling drug prices. Virtually all of the proposals nibbled at the edges while leaving drug companies’ unilateral power to set prices untouched. Drug stocks surged in the aftermath of the Blueprint’s launch.
Scene Five: On May 30, 2018, Trump promises that some of the big drug makers would announce “voluntary, massive drops in price” within two weeks followed by a deafening silence on stage for the next 29 days.
Scene Six: On June 29, Pfizer, a long proponent of Big Pharma’s right to set and raise prices unilaterally, announces higher drug prices on 41 medicines with no defensible rationale.
Scene Seven: On Monday July 9, Trump tweets: “Pfizer & others should be ashamed that they have raised drug prices for no reason. They are merely taking advantage of the poor & others unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe & elsewhere. We will respond!”
Scene Eight: Somehow Pfizer CEO Ian Read and President Trump clear their schedules within 24 hours for an “extensive discussion” after which Pfizer issues a statement sharing “the President’s concern for patients and commitment to providing affordable access to the medicines they need.” While promising to defer its price increases until the President’s Blueprint goes into effect or the end of the year, Pfizer pats itself on the back for bringing innovative new medicines to patients. The President, winking back at CEO Read, applauds Pfizer on this “great news for the American people.”
Backstage Pharma execs puff their cigars and drink their single-malt scotch while high drug prices and multiple price increases by other drug companies stay intact. There are no “voluntary, massive reductions in drug prices,” but Trump and Pfizer – wink-wink – present themselves as heroes to American payers who want real answers, not farces, in addressing crushing drug prices.
