An article published on November 16th in The Hill reported on a planned 5% increase in prices of 10% of Pfizer’s drug portfolio this January. I have to quote the article because it was really incredible to me. Pfizer states, “given the higher rebates and discounts, we expect that the healthcare system will share those benefits with patients so they do not experience higher costs for their medicines.”
The article further reported that “drug manufacturers like Pfizer give rebates to insurers to secure exclusivity on their drugs and boost their marketshare,” but that they don’t really expect net costs to increase.
Huh? This pricing practice has to change! What they are saying is that they are raising prices to provide incentives to pharmacy benefit managers (PBMs) and other middlemen to promote the drug. This will increase premiums for insured plans and rebate kickbacks to plan sponsors and insurance companies.
Who gets hurt? The uninsured who pay list prices, plan participants who don’t benefit from rebates (especially those in high deductible plans), and anyone buying an insured plan – because this will increase drug trend.
The “moratorium” drug manufacturers put on drug prices in mid-2018 in response to President Trump’s pressure was laughable. Significant price increases had already been effected prior to the gesture, and here they are again announcing higher costs in January.
Most political analysis I have read predicts that drug pricing will manage bipartisan support during this lame duck session. It seems the drug manufacturers are calling the politicians’ bluff. For the sake of controlling costs, I hope it happens soon.