LONDON, Sep 6 (APM) - Allergan's chief executive Brent Saunders on Tuesday launched a major public relations offensive following months of criticism of pharma industry's pricing policy, saying companies guilty of 'price gouging' have violated a social contract with patients.
Pharma has been at the centre of negative press headlines for many months, with Hillary Clinton saying frequently that she would fight pharma companies over pricing.
Last week, she said that if elected, she would protect U.S. consumers from price hikes on life-saving drugs by creating a consumer oversight panel and importing emergency treatments if necessary. (APMMA 49400)
Saunders in his blog called 'Our Social Contract with Patients', said he understood the public outcry over "price gouging" and added his voice to the condemnation of this behaviour. He added: "In this blog, I want to address my commitment to innovation, access and responsible pricing ideals", describing the companies which have hiked prices as "outliers".
He said all the people he knows in the biopharma industry come to work because they have a dream of helping people.
"As the focus on price has heated up, the innovation ecosystem has come under assault, and it is fragile. This ecosystem can quickly fall apart if it is not continually nourished with the confidence that there will be a longer term opportunity for appropriate return on investment in the long R&D journey."
In this 'social contract', patients understood that making new medicines required significant investment. At the same time companies, carrying out the "hard, long and risky work of bringing new medicines to market", understood that they had to price medicines in a way that made them accessible to patients while providing sufficient profit to encourage future investment, he said.
"It 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."
Saunders said that from his point of view, this social contract has four principles:
- invest & innovate
- access & pricing
- quality & safety
- education
He said Allergan is committed to risking billions of dollars to develop "life-enhancing innovations" and is similarly committed to making these branded medicines accessible and affordable to patients while also ensuring that it can continue to meet its 'invest and innovate' obligations.
Saunders singled out the pharma's commitment to responsible pricing. "We will price our products in a way that is commensurate with, or lower than, the value they create by mitigating or avoiding the need for other treatment modalities or providing better quality of life to those patients without other treatment options," he said.
Specifically, he added: "We will not engage in price gouging actions or predatory pricing. We will limit price increases."
He also pledged that Allergan will not embark on major price increases without corresponding cost increases as its drugs near patent expiration
In addition, Saunders said he would enhance patient access. "This means that Allergan will enhance our patient assistance programmes in 2017 to match the current industry leader(s)."
The company is also committed to improving patient access to its medicines by working closely with policymakers and payers.
Activist investor Carl Icahn made a $785.7 million investment in Botox-maker Allergan. Icahn who invests his personal fortune estimated by Forbes to be roughly $17 billion, bought 3.4 million shares, valued at $785.7 million, in the drugmaker during the second quarter. (APMMA 49188)
Allergan's share price dropped 14% over that period after Pfizer walked away from a planned merger, but some investors expect that Allergan will agree another deal with a different company.
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