Caving to pressure, Pfizer delays price hikes

Pfizer Inc. agreed to delay implementation of planned price increases for certain drugs a day after President Donald Trump launched an attack on the company, saying it should be “ashamed” of the move.

Trump said on Tuesday evening that the New York-based company would be “rolling back price hikes” after he spoke with its chief executive officer, Ian Read, and his administration’s top health official.

Related: Trump proposal to cut drug prices promises immediate impact

“Just talked with Pfizer CEO and @SecAzar on our drug pricing blueprint,” Trump said in a tweet Tuesday, referring to Health and Human Services Secretary Alex Azar. “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!”

On Monday, Trump had taken aim at Pfizer over its reported plans for take a series of price increases, blasting the move on Twitter and briefly rattling shares of the U.S. drug giant. Shares of Pfizer were down about 1.4 percent at $36.91 in late trading in New York.

“Pfizer & others should be ashamed that they have raised drug prices for no reason,” Trump said in a tweet. “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!”

Earlier this month, the Financial Times reported that Pfizer had raised prices on about 100 products, following a pattern of regular increases that the company takes each year. Pfizer had said that the list prices for the majority of its drugs and vaccines hasn’t changed, though it had changed the prices on about 10 percent of its products, including some reductions.

Pfizer said in a statement on Tuesday evening that it would put off price increases that took effect on July 1 in order to give Trump a chance to work on his blueprint to change health care. The delay will remain in effect until either the president’s “blueprint goes into effect or the end of the year – whichever is sooner,” Pfizer said. The drugs whose prices declined will remain in effect, Pfizer said.

“Pfizer shares the President’s concern for patients and commitment to providing affordable access to the medicines they need,” Read said. “We are encouraged that the president recognizes the value our industry brings to society and our ability to fulfill our mission to discover and bring innovative new medicines to patients.”

Pfizer shares fell in late trading, and were down 1.4 percent to $36.91 at 8:04 p.m. in New York.

President’s blueprint

The wide-ranging blueprint proposed by Trump sought to increase competition for medicines, cut list prices and reduce patients’ out-of-pocket costs. But few of the steps could be taken immediately and some would require action by Congress, a difficult step in an election year. The 44-page document was laid out as topics for discussion and it also has largely left unchanged the role of the pharmacy middlemen that the administration has blamed for many problems with drug costs.

The proposal avoided some of the thorniest ideas the drugmakers feared, including having the government directly negotiate prices and allowing the importation of prescription drugs from overseas. After the blueprint was announced in May, industry stocks gained.

Trump has promised to bring down drug prices, often using Twitter and stump speeches to call out pharmaceutical companies. For example, last August he criticized Merck & Co., saying the company was shipping jobs outside the U.S. while raising prices. And in January 2017, Trump said the drug industry was “getting away with murder.”

Pfizer isn’t the only company rethinking drug-price increases. Some of the world’s biggest drugmakers are canceling or reducing planned price hikes in the U.S., Bloomberg reported on Tuesday, pushed to retreat by a new California drug pricing transparency law and the intense national political pressure over pharmaceutical costs.

California’s law began to take effect earlier this year and requires drugmakers to give insurers, governments and drug purchasers advance notice of large price increases, as a way of publicly pressuring pharmaceutical companies to keep prices down.

In the past three weeks, Novartis AG, Gilead Sciences Inc., Roche Holding AG and Novo Nordisk A/S sent notices to California health plans rescinding or reducing previously announced price increases on at least 10 drugs.

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.