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Novartis Will Freeze Drug Prices Through End of 2018, CEO Says
The Swiss drug maker is the second pharmaceutical company to announce a halt to price hikes, coming after Pfizer's decision last week to reverse planned increases.
Swiss drug maker Novartis said early Wednesday it does not plan to raise prices through the end of the year, as it talks with US health officials about the Trump administration's plan to cut what consumers pay for prescription drugs.
The announcement came as part of the company’s second quarter earnings call. CEO Vasant Narasimhan said that the move was “prudent” in light of “a very dynamic environment in the United States.”
Pfizer announced last week that it would halt drug prices through the end of 2018, after CEO Ian Read spoke with President Donald Trump. Pfizer also said it would revisit price increases in 2019, to allow time for the administration to implement pieces of a blueprint, American Patients First, that includes dozens of policy ideas for reducing prices and out-of-pocket costs for patients.
Narasimhan told Reuters that while he had not spoken with Trump directly, company officials were having conversations with HHS about the blueprint and how it would affect the drug maker. Of note, the administration has said it wants to promote manufacturing of generics and biosimilar; Novartis’ generic unit, Sandoz has been under pricing pressure.
Monday was the deadline for comments on the blueprint via a formal Request for Information. The industry trade group, the Pharmaceutical Research and Manufacturers of America, issued an extensive response that called for severing the link between compensation levels for pharmacy benefit managers (PBMs) and rebates paid to them from drug companies. PBMs have been blamed for driving up the price of drugs.
Narasimhan said the pricing freeze had nothing to do with fallout over reports that the company’s previous CEO paid Trump attorney Michael Cohen $1.2 million for insights on the administration’s healthcare positions in the year after the 2016 election. Cohen is now under federal investigation in the Southern District of New York.
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