Pfizer – Price Restraint (2003 – 2004)
Increasing Access to Pfizer Products
WHERAS: Access to pharmaceutical products is an essential component of adequate health care for all Americans;
In 2002 Pfizer stated: “over the past decade, after accounting for discounts to federal government buyers and Medicaid, Pfizer’s annual price increase in the United States have averaged less than the annual rate of inflation as measured by the Consumer Price Index (CPI).” (Improving Access to Innovative Medicines, Pfizer Forum, 2002);
U.S. spending for prescription drugs was $140.6 billion in 2001, more than tripling since 1990. Such spending is projected to rise to $445.9 billion by 2012. (The Kaiser Family Foundation, Prescription Drug Trends, March 2003 and Health Affairs, Health Spending Projections for 2002-2012, 7 February 2003);
Price increases accounted for one-third of the increase in spending for prescription drugs in 2001 (Prescription Drug Expenditures 2001, National Institute of Health Care Management Research and Education Foundation, May 2002);
A report by Families USA, using data from the Pennsylvania Pharmaceutical Association Contract for the Elderly Program, found that on average, prices for the 50 most-prescribed drugs to the elderly rose nearly three-and-one-half times the rate of inflation from January 2002 to January 2003, compared to just under three times in the previous year. Pfizer products Lipitor, Norvasc, Celebrex, Xalatan, Zoloft and Glucotrol are among the top 50. (Out of Bounds, Families USA, 2003);
In 2002-03, the price increase of Lipitor (20mg) was 4.5 times the CPI; Celebrex 200 mg: 2.6 times the CPI, Norvasc 5 mg: twice the CPI, Xalatan: 3.3 times, the CPI: Zoloft 50 mmg: 2.8 times the CPI, Glucotrol XL 10 mg: 7.1 times the CPI (Out of Bounds);
These price increases are based on the average wholesale price, the price drug marketers suggest wholesalers charge pharmacies. People with no prescription drug coverage do not benefit from discounts negotiated by bulk purchasers of pharmaceuticals;
23% of Americans under 65 in 1996 and 38% of Medicare beneficiaries in 1999 had no prescription coverage. (Department of Health & Human Services, Report to the President, Prescription Drug Coverage, Spending, Utilization, and Prices, April 2000 and Health Affairs, Trends in Medicare Supplemental Insurance and Prescription Drug Coverage, 1996-1999, 27 February 2002).
Our company has instituted a prescription drug discount card, the Pfizer Share Card, which enrolls 355,000 low-income Medicare-eligible individuals with no prescription coverage. This is about 8.5 % of the 4.2 million eligible participants, and 2.8 % of the 12.9 million Medicare enrollees with no prescription coverage. (Pfizer, Report To America, June 2003 and Health Affairs, Trends in Medicare Supplemental Insurance and Prescription Drug Coverage, 1996-1999, 27 February 2002).
RESOLVED: Shareholders request the Board of Directors report by September 2004 on measures our company is taking to contain the price increases of its most-prescribed drugs to levels equal to or below the annual rate of inflation.
We believe enacting this proposal will help to align our company with its previously stated commitment on prescription drug price increases.