Pfizer – Price Restraint/Access and Affordability (2004 – 2005)
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 grew 11.5 percent to $216.4 billion in 2003, compared with $194 billion in sales the previous year. (IMS Health 2.17.04). 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);
In The American Journal of Bioethics: Vol 4 No 1 March, 2004, Donald W. Light, and Joel Lexchin, make the case that prices can be lower without jeopardizing basic research for new drugs: More exposure to
global price competition would encourage more innovative research and less of the derivative me-too research. “
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;
Proponents observe much doubt that the new Medicare prescription drug benefit will significantly alleviate the cost burden of prescription drugs for seniors.
Due to high cost of prescriptions, several city and state governments already have set up online and phone-based systems to help residents order drugs from Canada. A group of governors has requested permission from the federal government to start importing and warehousing prescription drugs from Canada. (American Medical News, March 15, 2004). 45 states have implemented or made plans to implement prescription drug cost controls to control Medicaid spending growth (Kaiser Commission on Medicaid and the Uninsured, 2003)
Shareholders request the Board of Directors report by September 2005 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.