Pharma industry has used price increases to fill gaps in innovation

unknownKEY TAKEAWAY: Pharma CEO’s are NOT celebrating the election of Donal Trump and are in fact worried about the incoming administration’s stance on drug pricing.

Allergan’s Chief Executive, Brent Saunders, said in an interview with Fortune magazine “pharma companies are breathing a sigh of relief, but Trump could be more critical of drugmakers and their price increases than the industry expects.  Trump could be a “more vicious tweeter” against the drug industry than his former Democratic rival Hillary Clinton had been during the campaign”.

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Saunders said Americans are rightly angry about price increases, and the industry needs to police itself or face government repercussions.

“I worry today that the pharmaceutical industry has a very false sense of security because of the Trump administration and a Republican-controlled Congress,” Saunders said.

Regeneron Pharmaceuticals CEO Len Schleifer, speaking on a panel at the Forbes conference, said the industry will be seen in a bad light as long as it maintains the common practice of taking twice yearly, often double-digit, price increases on widely-used medicines.

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“We as an industry have used price increases to fill gaps in innovation,” he said.

DTC Cutbacks?

My group is currently working on DTC plans for 2017 but there are restrictions.  Most budgets are not guaranteed for the year, while others are tied to “triggers” such as hitting specific sales goals.  There also seems a great deal of interest in more targeted marketing with specific measurement criteria. We are preparing for a good, better, best scenario when it comes to budget planning and are asking media agencies for “value added” programs.

I don’t expect DTC to increase, but I do see a shift in channels and more experimentation with mobile apps and eCRM activities.  Right now there are no “mass market” drugs on the horizon, but we believe that oncology will be a growing area for DTC.

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