Pfizer CEO: Drug Rebates Will be Eliminated
Pfizer CEO Ian Read told investors in Tuesday’s earnings call that President Donald Trump will eliminate drug rebates, which if true, would be a blow to pharmacy benefit managers like Express Scripts or CVS.“Initially, reforms will be focused on the public sector where the rebates can be taken out of the safe harbor,” Read said, noting that private payers are likely to follow suit.
Though he did not offer a timeline for when rebates would be eliminated, he said he thought it was a “political decision” and a priority for this administration, while noting that there’s a “sense of urgency."
“I would see rebates going away and the system accommodating to value and net price,” Read added. “If you create clarity on net prices in public sector, you’ll effectively force transparency into the private sector as well…I think it’s very positive for the health of the pharmaceutical market."
As far as Trump’s drug pricing blueprint, he also said he’s supportive of it.
The collaboration between Trump and the pharmaceutical industry on the blueprint reveals an about face for the president that took a little less than two years.
In January 2017, Trump opened a press conference with an unexpected shot at pharmaceutical companies and their lobbying groups on Capitol Hill, saying, “They’re getting away with murder.”
Trump previously pledged to save “billions” and made some veiled comments about doing more “bidding,” or negotiating, which would presumably lower the cost of what the government pays for pharmaceuticals, and which the lobbying group PhRMA is fiercely opposed to, particularly for Medicare Part D.