Pharma pricing has been reeling from bad news in recent weeks. U.S. President-elect Donald Trump seeming out of the blue recently vowed to bring down drug prices – a statement which send drug stocks tumbling.
At almost the same time, the National Health Institute in the U.K. announced a record $1.06 billion fine against drug giant Pfizer for overcharging NHS for an anti-epilepsy drug. A second distributor, Flynn Pharma, was fined about $7 million for an overnight 2,600% drug increase in 2012.
“The companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied up by thousands of patients,” said Philip Marsden of U.K.’s Competition and Markets Authority. Marsden went on to say that while, in the U.K., companies can generally set the prices they want, abuse will not be tolerated. “There is no justification for such rises when phenytoin sodium capsules are a very old drug for which there has been no recent innovation or significant investment. This is the highest fine the CMA has imposed and it sends out a clear message to the sector that we are determined to crack down on such behaviour and to protect customers, including the NHS, and taxpayers from being exploited.”
Both companies said they would appeal the decision.
Trump, meanwhile, was much less specific. “I’m going to bring down drug prices,” he said. “I don’t like what has happened with drug prices.”
Trump – along with Democrat hopefuls Hillary Clinton and Bernie Sanders – were critical of drug prices on the campaign trail. Trump proposed that Medicare be allowed to negotiate drug prices and that drugs should be imported from abroad. Trump’s presidential transition website makes no mention of tackling high drug prices – though it does say he will reform the Food and Drug Administration “to put greater focus on the need of patients for new and innovative medical products.”
Pharma had rallied after the election on the belief that a Trump presidency would lessen sector risk. Some companies put in place their own drug-pricing caps. After the EpiPen scandal this summer, Allergan said it would limit increases to less than 10% once a year.
Before this latest Trump statement, Allergan CEO Brent Saunders said the industry has a “very false sense of relief or security” in the wake of Trump’s election. “To think Trump isn’t a populist, that he won’t jump on the next EpiPen scandal and won’t tweet against any company that does something like that, you’re fooling yourself.”
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