The giant drug company Pfizer seemed to hand President Trump a big win Tuesday when it announced it would roll back a slate of price increases that took effect July 1.
Trump, naturally, took credit for the move and tweeted it out as “great news for the American people.”
If you know anything about the drug industry or Trump’s penchant for taking credit he doesn’t deserve for policies that often don’t even exist, you’ll know the punchline: The rollback isn’t really a rollback. It’s a sop to Trump and nothing like good news for the American people.
To begin with, Pfizer isn’t rolling back its price increases, which affected 100 products, including Viagra, and was the second such price hike this year alone. It’s “deferring” them — and making clear that the deferral is temporary.
“The company will return these prices to their pre-July 1 levels as soon as technically possible,” the company’s statement said. “The prices will remain in effect until the earlier of when the president’s blueprint goes into effect or the end of the year – whichever is sooner.”
In the wake of the announcement, Peter Maybarduk, director of the Access to Medicines Program at the advocacy group Public Citizen, said: “Pfizer’s alleged concession to Trump is a sham. Pfizer is only deferring price increases — not canceling them, and certainly not lowering its prices.”
The “blueprint” mentioned in the announcement is the policy statement Trump issued May 11, setting forth several initiatives and proposals for bringing drug prices down. Most experts in the field faulted the blueprint for neglecting some of the most potentially effective options. Pharmaceutical stocks jumped after the announcement and haven’t looked back: Pfizer has gained 4.2% over the intervening two months and Merck is up by 7.5%. Gilead, the maker of hepatitis C drugs that can cost more than $80,000 per treatment and therefore might be ripe for a price cut, is up 17.2%.
Maybarduk saw the byplay between Trump and Pfizer as a reflection of the ineffectiveness of the blueprint. “The administration’s ‘blueprint’ fails to discipline Big Pharma in any meaningful way,” he stated. “Instead, the administration aims to protect manufacturers and help them survive a public health and public relations crisis. … You can’t fix a systematically corrupt industry by tweeting.”
Given that context, Pfizer’s action looks more like an effort to keep an obstinate but easily gulled president mollified, at least in the short term. That’s especially true since its price increase embarrassed Trump, who only weeks earlier had promised that major drugmakers would shortly be announcing “massive drops in prices.”
Pfizer has essentially issued Trump an ultimatum — implement the blueprint by January 1, or we shoot the price rollback and dump it over the side. It shouldn’t escape notice that Pfizer’s deadline probably times the revival of its price increases to after the November midterm elections, allowing Trump to keep claiming credit through the campaign season.
There’s no evidence that Trump’s table-pounding has done anything to moderate price increases in the pharmaceutical industry. A recent survey by Wells Fargo, reported by Politico, identified price increases in 104 drugs in June and the first two days of July, averaging 31.5%.
Pfizer has been among the most aggressive price-hikers. An analysis by the drug consulting firm Pharmacy Benefit Consultants found significant price increases dating back to January 2017 for some of Pfizer’s most popular prescription drugs, averaging nearly 30%, not counting the now-deferred July increases: Lipitor up 31.1%, arthritis treatment Celebrex up 19.8%, depression drug Zoloft up 31.1% and Viagra up by 39.5%.
The increases at Pfizer and other companies come in the wake of a bounty they’re likely to collect from the tax cut passed by Senate Republicans and signed by Trump in December. The measure will deliver an estimated $1 billion to Pfizer alone this year, according to calculations by Senate Finance Committee Democrats.