Pfizer CEO calls US drug price law 'negotiation with a gun to your head' (updated)
11/05/2023 18:49
(Recasts first paragraph with comments on Medicare drug
pricing; adds CEO quotes)
By Michael Erman and Bhanvi Satija
NEW YORK, May 11 (Reuters) - Pfizer Inc PFE.N Chief
Executive Albert Bourla on Thursday called U.S. plans to
negotiate drug prices for its Medicare health program
"negotiation with a gun to your head" and said he expects
drugmakers to sue in an attempt to halt the process.
"It is not negotiation at all. It is price setting," Bourla
said at a Reuters newsmaker event on Thursday, referring to the
Biden Administration’s signature drug pricing reform, part of
the Inflation Reduction Act (IRA). The law aims to save $25
billion through price negotiations by 2031 for Americans who pay
more for medicines than any other country.
The pharmaceutical industry says the law, passed last year,
will result in a loss of profits that will force drugmakers to
pull back on developing groundbreaking new treatments.
The companies have begun laying the groundwork to fight the
U.S. plan.
"I think that there will be legal action, but I'm not sure
if we'll be able to stop anything before" the new prices take
effect in 2026, Bourla said. He added that he is also not
optimistic that Congress will act to change the law.
He did acknowledge some positive aspects of the law for
patients, such as lower out-of-pocket costs for medicines.
Bourla is looking to shift Pfizer's focus from the COVID-19
vaccines and treatment that put the company at the forefront of
the pandemic response and led to a once-in-a-lifetime surge in
revenue.
The company is in the midst of a steep but expected fall in
COVID product sales and is also preparing for declining revenue
in coming years for some of its top-selling drugs as they begin
to face competition from cheap generics.
As a result, investors are looking for Pfizer to produce new
blockbuster drugs that can pull in billions every year, either
from the company's own pipeline of medicines in development or
through deals.
"Pfizer is giving all the profits that we made from COVID in
'21 and '22 and what we will make in '23 to acquire technology
and products that we believe will allow us to battle cancer," he
said, calling the effort the drugmaker's "next moonshot."
The COVID products drove Pfizer's revenue to record levels,
topping $100 billion in 2022 and $80 billion in 2021.
Bourla has already overseen a string of acquisitions to
bolster Pfizer's drug pipeline, headlined by the $43 billion
deal for Seagen, which makes complex targeted cancer therapies.
Pfizer's other recent deals include its purchase of Biohaven
Pharmaceutical Holding, maker of a migraine prevention
treatment, for $11.6 billion, a $6.7 billion buyout of
ulcerative colitis drug developer Arena Pharmaceuticals, and a
$5.4 billion deal for Global Blood Therapeutics with its focus
on treating sickle cell disease.
Bourla led Pfizer as the New York-based drugmaker raced
alongside German partner BioNTech 22UAy.DE to develop a
vaccine for COVID as much of the world locked down in 2020. The
company also developed Paxlovid, a life-saving antiviral
treatment for the disease.
The U.S. government will end the COVID Public Health
Emergency on Thursday that allowed millions of Americans to
receive vaccines, tests and treatments at no cost.
Pfizer and other COVID vaccine makers expect to sell the
next round of booster shots on the commercial market rather than
directly to the federal government as they had previously.
Pfizer has said it expects to roughly quadruple the price of
its COVID shot to about $110 to $130 per dose this year.
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Drugmakers set strategy for legal fight against US pricing
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(Reporting by Michael Erman in New York; Editing by Bill
Berkrot)
((michael.erman@thomsonreuters.com;))