Allergan chief executive Brent Saunders has slammed aggressive price increases in the pharma sector, saying they break an “unwritten social contract”.
The comments are made in a blog post published on the pharma company’s website yesterday, in which Saunders says he wants to “add my voice to the condemnation” of companies that exploit dominant positions in the market to ramp up the prices of old medicines.
There is an understanding that companies making new medicines need to price them at a level that can allow a return on the investment in R&D and encourages future research, but that does not impede patient access, says Saunders.
That social contract “was designed to be a win-win-win. New medicines for patients. Lower overall cost or damage of disease. An appropriate return on capital for those taking risk by investing time and talent in the arduous and uncertain task of developing new treatments.”
“Those who have taken aggressive or predatory price increases have violated this social contract!” he asserts.
Saunders’ post mentions no names but comes in the wake of a public outcry over Mylan’s decision to hike the price of its EpiPen (epinephrine) product – used to save the lives of people suffering serious allergic reactions – by 400%.
The company has since lowered the price of the product and said it will introduce a cheaper generic, but the media attention has already prompted an investigation into the company’s practices by politicians in the US.
Now, Mylan is also facing a probe into claims that it employed anti-competitive terms in EpiPen sales contracts with New York schools. Meanwhile other companies – including Valeant, Turing Pharma and Horizon Pharma – have also been criticised in recent months for implementing massive price increases for old brands.
As a result presidential candidate Hillary Clinton has made medicine pricing a pillar of her election campaign, with specific measures proposed to tackle ‘outlier companies’ indulging in price gouging, while the FDA has promised accelerated review of rivals to over-priced drugs.
“I don’t like what is happening, and despite the fact that it is hard to speak out publicly on this, now is the time to take action to spell out what this social contract means to me,” writes Saunders.
The blog covers the responsibilities of pharma companies in investing in new drugs, making them accessible and affordable for patients through “responsible pricing”. It also spells out the need to ensure new medicines are safe and effective and used “in the right patients for the right conditions”.