- Company plans to increase prices only once a year, CEO says
- Excessive price hikes violate ‘social contract’ with public
Allergan Plc laid out a plan to curb price increases on its drugs in response to public outcry over the costs of medication industrywide, most recently revolving around the price of Mylan NV’s EpiPen.
Allergan will raise prices on its products only once a year, and increases will be limited to the single-digit percentage range, Chief Executive Officer Brent Saunders said in a blog post on the company’s website. That should limit overall increases on prices to no greater than “slightly above” the current rate of inflation, he said.
The pharmaceutical industry has a “social contract” with patients, including an understanding that drugs should be priced to be accessible while providing profits to fuel research and development, Saunders said. Mylan has become the target of Washington lawmakers and public outrage after raising the price of EpiPen, used to quell life-threatening allergic reactions, by more than 400 percent since acquiring the drug in 2007.
“I understand the public outcry and add my voice to the condemnation,” of dramatic price increases on life-saving medicines, Saunders said in the post. “Those who have taken aggressive or predatory price increases have violated this social contract!"
Allergan, based in Dublin and with executive offices in New Jersey, makes branded drugs including Viberzi, a treatment for irritable bowel syndrome, and Botox, the anti-wrinkle injection. The company will not raise prices dramatically on drugs that are about to lose patent protection and face generic competition, unless it has made investments that would justify such an increase, Saunders said. The drugmaker will also spend “billions” on research and development, he said, without specifying an exact amount.