Novartis freezes drug prices in a nod to Trump
Novartis has announced it would not raise drug prices in the US this year, while Merck & Co announced huge cuts in the price of its hepatitis drug following pressure from president Trump.
Novartis’ position about this year’s price increase has been announced during the Q2 2018 earnings call transmitted as a live audio webcast.
Vasant Narasimhan, Novartis’ CEO, addressed journalists saying that the company made the decision to “withdraw any further price increases” and also made a commitment “not to take any further price increases for the remainder of 2018”.
“We thought that was prudent given the dynamic environment that we’re currently in. A lot of discussions around how to shape policy, and of course, our net prices overall are flat-to-declining in the US in any case”, added Narasimhan.
Novartis's decision to hold the line on prices in the US was voluntary and the company aimed to have a "system that can support breakthrough innovation ... but still ensure affordability."
The statement came after Pfizer reversed and froze price increases on some drugs in the US following president Donald Trump’s social media spree.
The president took his frustration to Twitter, saying: “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!”
Trump's administration outlined a plan for lower prices a few months ago. Many critics have said it does not go far enough, however, Narasimhan said Novartis was "very positive on the blueprint" the president has put forward on prices.
The recent price freeze statements were very well received by the president, who used the same social media channel to applaud drug makers.
In his recent tweet he said: “Thank you to Novartis for not increasing your prices on prescription drugs”.
“Likewise to Pfizer. We are making a big push to actually reduce the prices, maybe substantially, on prescription drugs.”
Last night also Merck & Co responded to the president's appeal. The company will drop the price of Zepatier, a Hepatitis C drug, by 60%, and decrease the costs of "several other" drugs by 10%.
It also said it would not increase the average net price of drugs in its portfolio by more than inflation annually.
Alex Azar, Health and Human Services Secretary responded to this news with a statement: “The president’s blueprint for lower drug prices is working, drug prices are coming down, and American patients are going to see the savings in their pocketbook. We welcome Merck’s decision to reduce prices and restrain future price hikes."
However the price cut may also be motivated by the increasingly competitive hepatitis C drug market - sales of Zepatier slumped in the last quarter.
Amid a shrinking patient pool and tough competition from companies like Gilead and AbbVie, Zepatier sales were down 65% in the last quarter, to $131 million.