Pfizer to Raise Drug Prices, Ending Trump-Requested Freeze

(Bloomberg) -- Pfizer Inc., the U.S.’s biggest drugmaker, will raise prices on about 10 percent of its pharmaceutical products next year after briefly halting such increases at the request of President Donald Trump earlier this year.

The average list-price increase on the 41 drugs will be about 5 percent, Pfizer said in a statement Friday.

Key Insights

• Trump negotiated a brief halt to Pfizer’s regular price increases by going directly to Chief Executive Officer Ian Read in July. But the drugmaker said the pause on increases would last only until the end of 2018, or until Trump’s wide-ranging plan to lower pharmaceutical costs was fully implemented (it hasn’t been).
• U.S. officials aren’t happy: The move illustrates the “perverse incentives of America’s drug pricing system,” said a spokeswoman for the Health and Human Services Secretary Alex Azar.
• While Pfizer regularly takes price increases throughout the year, these planned increases are fewer in number than it usually takes.
• Read said during Pfizer’s third-quarter earnings call that it would resume increases: “I expect our approach by the end of year will be, what I would characterize as business as normal. We price to the marketplace. We price competitively, and we will make those decisions towards the end of the year and early in January,” he said at the time.

Market Reaction

• Pfizer’s shares closed up less than 1 percent to $43.51 in New York.
• Read Pfizer’s full statement here.

To contact the reporters on this story: Anna Edney in Washington at aedney@bloomberg.net;Cynthia Koons in New York at ckoons@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

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