(Reuters) - Pfizer Inc’s chief executive on Thursday said recent proposals by Democratic presidential candidate Hillary Clinton to curb “unjustified” U.S. drug prices would dampen investment in innovative new drugs and ultimately hurt consumers.
“(They) would be very negative for innovation,” Ian Read said in webcast from the annual Wells Fargo healthcare conference in Boston. He said Clinton’s proposals, if ever approved, would be a step toward a one-payer government system of price controls on prescription medicines.
Critics of the pharmaceutical industry have long argued that drugmakers unfairly raise prices at will, making their products increasingly less accessible to patients. Drugmakers counter that it can cost $1 billion dollars or more to develop the typical drug and say they need to be reimbursed for the costs and risk-taking.
Read said he did not believe price controls like those seen in Europe would occur in the United States.
“A lot depends on the composition of the Senate and House,” he added, referring to whether Republicans continue to dominate at least one branch of Congress and can be a counterweight to a potential Clinton White House.
Clinton last week said that if elected to the White House she would create an oversight panel to protect U.S. consumers from large price hikes on long-available, lifesaving drugs and to import alternative treatments if necessary, adding to her pledges to rein in overall drug prices.
She said the oversight panel would be able to levy fines and impose penalties on manufacturers when there has been an unjustified “outlier” price increase on a long-available or generic drug, meaning an especially high increase.
Clinton cited Turing Pharmaceuticals LLC’s 5,000 percent price increase for AIDS drug Daraprim and Mylan NV’s repeated steep price increases on its EpiPen device for severe allergy sufferers as troubling examples of price hikes that have attracted bipartisan congressional scrutiny.
Read on Thursday said patients are increasingly confused about actual drug prices because pharmacy benefit managers require drugmakers to pay ever-higher, typically confidential, rebates to get their drugs on insurance company formularies. Moreover, drugstores and distributors also take their cut of profit.
He predicted pharmaceutical companies and such intermediaries will eventually agree to modify the system to make pricing more transparent.
Brent Saunders, chief executive of Allergan Inc, on Wednesday also faulted Clinton’s proposals, saying in a free market it would be difficult for an oversight panel to determine fair prices.
Reporting by Ransdell Pierson; Editing by Tom Brown, Bernard Orr