9/13/2017 Has the Brent Saunders price-hike limit become a de facto pharma rule?

| FiercePharma

Pharma

Has the Brent Saunders price-hike limit become a de facto pharma rule?

by Eric Sagonowsky | Aug 14, 2017 10:05am

Allergan CEO Brent Saunders' pledge to limit price hikes has distinctly a ected the industry's pricing practices, data from Bernstein show.

Nearly one year ago, as the pharma industry was beset by pricing scrutiny, Allergan CEO Brent Saunders pledged to keep his company’s hikes under 10%. Since then, that
pricing rule has spread—even among companies that haven't publicly promised to do the same.

Bernstein analyst Ronny Gal reports that for 92 drugs his specialty pharma team tracks, none has posted price increases higher than 9.9% so far this year.

“It seems that o cially, or uno cially, most drug companies have adopted the policy,” Gal said in an interview, noting that this year’s increases have been “clearly lower than
years past.”

The drugs are from 11 specialty pharma companies, including branded drugmakers Merck KGaA, Shire, Novo Nordisk and Amgen, as well as Teva and Mylan, companies that
mostly make generics but also sell some branded drugs. It was Mylan's branded EpiPen autoinjector whose price hikes set o the restorm that ended up spawning Saunders'
pricing pledge.

Prices on 30 of the meds have gone up between 9% and 9.9% so far this year, according to Bernstein's data, while 40 have had price hikes between 8% and 9.9%. The gures
could climb higher as the year goes on. The data don't include info from larger drugmakers such as P zer, Roche and Johnson & Johnson.

RELATED: Allergan CEO swears o big price hikes in manifesto on pharma's 'social contract'
 
Notably, after raising the price on EpiPen by 15% twice each in 2014 and 2015, Mylan hasn’t taken a price increase on the epinephrine injector since May of last year,
Bernstein's data show. Years of price hikes on that med put a spotlight on Mylan—whose CEO testi ed before Congress—while other companies such as Valeant and Turing
Pharmaceuticals played a role back in 2015.

Amid the backlash, large drugmakers sought to distance themselves from “bad actors” in the eld. Saunders couched his pricing commitment as part of a "social contract"
between pharma and society, and, as the controversy grew, he argued that the industry should police itself or risk a regulatory overhaul.

http://www.fiercepharma.com/pharma/saunders-pricing-pledge-sparks-industrywide-trend-data-show 1/3
9/13/2017 Has the Brent Saunders price-hike limit become a de facto pharma rule? | FiercePharma
Nearly a year later, Gal said companies have signed up for the single-digit rule because “it works.”

“I’m guessing it will stay here until the noise comes down,” he said. “Then, someone will take a step up and if there’s no response, more people will do it.”

RELATED: Eli Lilly says it's cutting an average of 50% o list prices—and its price hikes don't work

Drugmakers including Novo Nordisk, AbbVie and Takeda quickly jumped on board with the Saunders pricing pledge, while Sano recently committed to limiting hikes to the
level of o cial health in ation, projected to be 5.4% in 2017.

Elsewhere in the industry, Johnson & Johnson, Merck and Eli Lilly have released high-level information about pricing, demonstrating a trend toward higher rebates to
pharmacy bene t managers. Eli Lilly, for instance, reported that an average 14% list price hike across its portfolio for 2016 amounted to a net hike of just 2.4% after rebates.

To some degree, drug pricing talk has quieted in Washington, D.C., as no new controversies have fueled the issue in recent months. Reports that the Trump administration’s
approach to pricing would favor the industry also helped lift investor concerns.

Read more on
drug prices, pricing, industry in uence, Allergan, Teva Pharmaceutical, Mylan, EpiPen, Amgen, Biogen, Regeneron Pharmaceuticals, Jazz Pharmaceuticals, Johnson &
Johnson, P zer, Turing Pharmaceuticals, Valeant Pharmaceuticals, Bayer, Shire, Novo Nordisk

What really happened with Pascal Soriot's rumored move to Teva? | FiercePharma

Teva accuses former executive of siphoning trade secrets to her rival CEO boyfriend | FiercePharma

Ex-AstraZeneca executive Luke Miels accuses CEO Soriot of threatening him for taking GSK job | FiercePharma

FDA slams Indian drugmaker for using rusty equipment | FiercePharma

by Taboola

FREE PHARMA NEWSLETTER

Join over 170,000 subscribers who benefit from FiercePharma’s coverage on such topics as pharma news and deals, patents and litigation, FDA regulations and more.

Join for free 

Email Sign up

Popular Content

Lilly to cut 3,500 jobs, take a $1.2B hit as it aims for $500M in savings
Sep 07, 2017

After Keytruda deaths, FDA hits pause on Bristol-Myers Squibb's Opdivo myeloma trials
Sep 07, 2017

Survival win has Bristol-Myers' Opdivo-Yervoy combo looking better as rst-line kidney cancer treatment
Sep 07, 2017

Senator’s report documents deceit by former employees of embattled Insys

Sep 07, 2017

http://www.fiercepharma.com/pharma/saunders-pricing-pledge-sparks-industrywide-trend-data-show 2/3