Pfizer to Hold Line on Prices

Pfizer Inc., the first leading pharmaceutical company to unveil its 1993 pricing strategy, on Monday said the cost of its prescription drugs would not increase more than 4.5% this year.

Pfizer said its prescription drugs would cost an average 3% more this year for wholesalers, compared to an average 2% increase in 1992. The company noted that there will be no increases on many of its major products.

Other drug giants are expected to take similar action to hold the line on price hikes. Merck & Co., the leading U.S. pharmaceutical maker, has said repeatedly it will keep price increases in line with inflation.

“Our growth will continue to be driven largely by volume--not price--increases,” said Pfizer Chairman and Chief Executive William Steere Jr.

The pharmaceutical industry has come under attack in recent years for price increases that vastly outpaced the rate of inflation. Last year, the big U.S.-based drug companies took their first steps to limit price increases to deflect the criticism as well as the threat of government regulation.

According to figures from Paine Webber Inc., the price of prescription drugs rose an average 5.2% last year, compared to a 9.4% increase in 1991.

“Obviously the dynamics of the marketplace are not allowing them to raise prices,” said Barbara Ryan, an analyst with Alex. Brown & Sons Inc.

Drug makers become defensive at any hint the government might try to dictate the prices they can charge. Pfizer’s Steere said he believes cost containment can be best achieved through “reform that strengthens competition in the marketplace.”