Pharma CEO Ian Read forcasts rebate-free drug market
pharmafile | August 1, 2018 | News story | Research and Development | CEO, Ian Read, PBMs, Pfizer, Rebates
The CEO of American multinational Pfizer has said that he believes the Trump administration will eliminate rebates on prescription drug purchases.
Pfizer CEO Ian Read told investors “I believe we are going to go to a marketplace where we don’t have rebates,” as he answered questions about the Trump administration’s plans to overhaul drug pricing. Read confirmed his belief in the eventual abolition of PBMs in saying “I do believe that removal of the rebates will be a priority” in an interview with the Associated Press.
The remark has come as the powerful pharmaceutical trade lobby PhRMA, proposed a “bold new policy position” aimed at transforming the way through which payments in the drug supply chain are made. The organisation argued that Pharmacy Benefit Managers (PBMs), the price negotiating middle men who act as intermediates between pharmaceutical companies and insurers, should be paid a set fee rather than by commission.
United States Health Secretary Alex Azar reiterated the sentiment in stating: “Right now, everybody in the system makes their money off a percentage of list prices. We may need to move toward a system without rebates” as he suggested that the current system offers no incentive to reduce the price of drugs.
While Pfizer and others temporarily delayed price hikes on their products until the end of 2018, the American drug giant posted a $3.9 billion profit in the second quarter of this financial year which equated to a 29% profit margin.
Louis Goss
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