Pfizer – Price Restraint/Access and Affordability (2005 – 2006)
Increasing Access to Pfizer Products
RESOLVED: Shareholders request the Board of Directors report by September 2006 on measures Pfizer is taking to contain the price increases of its most-prescribed drugs to levels equal to or below the annual rate of inflation.
Enacting this proposal will align our company with its previously stated practice on prescription drug price increases.
Access to pharmaceutical products is essential for adequate health care for all Americans; we believe that restraining price increases is an effective way to expand access to pharmaceutical products.
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 has averaged less than the annual rate of inflation as measured by the Consumer Price Index.” (“Improving Access to Innovative Medicines”, Pfizer Forum, 2002).
2004 saw the largest average annual price increases in four years, with Pfizer’s increases ranging from 2.9% (Lipitor 20 mg and 40 mg) to Norvasc (7.1%). (AARP Public Policy Institute, April 2005).
In 2003, more than 14 million American adults with chronic conditions could not afford all of their prescriptions.As medical needs for prescription drugs increase, the proportion of working-age Americans, especially those with chronic conditions, going without prescription drugs because of cost concerns will likely grow. (Center for Studying Health System Change Issue Briefing 95, May 2005);
In a survey, one-fifth of all women said they hadn’t bought at least one prescribed drug because they felt they couldn’t afford it. (Kaiser Family Foundation July 2005)
Spending in the U.S. for prescription drugs rose by 400% since 1990, with price increases for existing drugs accounting for 25% of the increase. (Kaiser Family Foundation, Prescription Drug Trends, October 2004).
We believe our proposal can be implemented with minimal disruption of research and development. As The Economist noted: “There is a fallacy that the price of a drug is somehow related to the cost of R&D. One will often hear arguments made by industry to justify high prices. The reality is that the price of a drug on the market has absolutely no relation to how much it cost to produce it. Drugs are priced in a way…that is essentially what the market will bear.” (“Prescription for Change,” The Economist, June 16, 2005)
Rapidly rising drug costs reduce the impact of drug discount programs and prescription drug benefits. The LA Times reported that industry discount programs are “not easy to work with” and some health care providers “have had to hire full-time staff members who do nothing but help patients with their applications.” (“Free drugs for poor may be hard to get”, Los Angeles Times, May 15, 2005).
Our company offers a discount drug program for the uninsured, Pfizer Pfriends. While such programs are welcome, moderating price increases could be a more efficient and effective way to increase access to medicines, with minimal impacts of profits and research. If you agree, please vote in favor of this proposal.