Pfizer CEO: What Trump Doesn't Understand About Pharma
January 18, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Pfizer 's chief executive officer, Ian Read, recently spoke at the World Economic Forum in Davos, Switzerland. As part of his chat, Read discussed President-elect Donald Trump’s recent statements about drug pricing.
During the presidential campaign, Donald Trump hadn’t said much about drug pricing. At one point he suggested that he would allow cheaper drugs manufactured abroad to be sold in the U.S. Then, after the election, on November 11, 2016, the Trump website listed six healthcare policies the administration intended to tackle. None of them were related to drug prices.
Then in a Time magazine interview, President-elect Trump said, “I don’t like what’s happened with drug prices.” And then most recently, he told the Washington Post that lower drug prices were going to be a central part of his plan to lower healthcare costs.
Read made the odd statement at the WEF, “We need to pay more for medicine so we can develop more good medicine, so we can drive, through competition, lower costs.”
That would appear to be saying that drug prices should go up so they can go down. If that doesn’t exactly make sense, at least as a short-term strategy, his suggestion that Trump doesn’t understand that good drugs cost a lot of money to make probably does.
“The pill is not the point,” Read said. It’s only a “delivery mechanism for knowledge” to cure a disease or illness.
Trump’s stance on healthcare reform is fairly fuzzy. For the most part, he has insisted that he and the GOP plans to “repeal and replace” the Affordable Care Act (ACA), and while the Congress began taking steps to defund portions of the ACA, Trump seemed to undercut those efforts when he told The Washington Post that his own replacement plan was almost completed and he wouldn’t let Congress get in his way. “The Congress can’t get cold feet because the people will not let that happen,” Trump said.
Without much detail, Trump then said he wanted “insurance for everybody” with “much lower deductibles,” which sounds an awful lot like universal healthcare—something the GOP has been adamantly against, and low-deductible plans, which haven’t been associated with the ACA or any GOP plans.
And at least some of the GOP politicians are expressing worries on how quickly the “repeal” part is happening, with little evidence a “replace” component even exists. “I’m very concerned on the policy side specifically, that the replacement occur either simultaneously or as close to simultaneously as possible,” GOP Rep. Charlie Dent of Pennsylvania told CNN prior to Friday’s vote. “If we don’t provide a credible replacement plan, my main concern is that there would not be gaps in coverage for people who are currently subsidized. Also concerned about how the insurance markets might react.”
Otherwise, Ian Read appears optimistic about the incoming Trump administration, noting that Trump hasn’t received much data about competition in the drug industry. “Trump is going to be someone that will make sure patients are OK,” Read said.
CNBC writes, “Read’s strategy is somewhat bold. Instead of acquiescing to Trump, he seems to be preparing for a bit of a fight over his company’s pricing strategy.”
At this stage, it may be rather difficult to develop a strategy, since Trump’s statements haven’t been consistent or detailed. At his recent press conference. Trump said, “I think a lot of industries are going to be coming back. We have to get our drug industry coming back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs, but they don’t make them here. To a large extent. And the other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder.”
He added, “Pharma has a lot of lobbies, a lot of lobbyists and a lot of power. And there’s very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don’t bid properly. And we’re going to start bidding and we’re going to save billions of dollars over a period of time.”
Although it’s not completely clear what Trump is referring to throughout this statement, some of it seems to refer to tax inversions when companies like Mylan and Allergan hold tax domiciles outside the U.S. This was part of Pfizer’s plan with the Allergan merger that fell apart. However, if you take Trump’s words at face value, he would seem to be suggesting an assault on drug companies, drug pricing, and negotiations.
Read may not be the only biopharma CEO considering a strategy that might include fighting.