Allergan CEO Brent Saunders on Tuesday unveiled a "social contract with patients" in which the executive promised that the company will take several steps to prevent price gouging on its products. Specifically, the drugmaker said it would limit price increases on branded medicines to no more than one per year, with the rises restrained to low-to-mid single digit percentages.
"Our expectation is that the overall cost of our drugs, net of rebates and discounts, will not increase by more than low-to-mid single digits percentages per year, slightly above the current annual rate of inflation," Saunders explained. The executive noted "we will price our products in a way that is commensurate with, or lower than, the value they create," adding that the company will work with policymakers and payers to ensure access to its treatments.
In addition, Saunders vowed that Allergan will "not engage in the practice of taking major price increases without corresponding cost increases as our products near patent expiration." The executive remarked "while we have participated in this industry practice in the past, we will stop this practice going forward." Saunders said that Allergan will also provide an update on the impact of price on its business at least once a year.
The news comes shortly after US presidential candidate Hillary Clinton unveiled plans to tackle "unjustified" price increases for medicines. Clinton's proposal follows recent scrutiny from US lawmakers regarding price increases for Mylan's anaphylaxis therapy EpiPen (epinephrine). For related analysis, see ViewPoints: Mylan scrutinised, and ViewPoints: Mylan competes with itself, but generic EpiPen launch unlikely to calm firestorm.
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