From The Washington Post:
Allergan, the pharmaceutical company best known for making Botox, pledged Tuesday morning to limit annual price increases on its drugs and to stop hiking prices on medicines right before their patents expire.
In the announcement published on the company’s website, Allergan chief executive Brent Saunders said the company will limit price hikes to once a year and each increase will be no more than a single-digit percentage.
Saunders said Allergan will price its products based at or below their value to patients, based on how much the drugs improve their quality of life and how well they work compared to other drugs. He added that the company will also disclose how prices are affecting the growth of its business at least once a year.
“I think the entire biopharmaceutical sector needs to take a step back, look in the mirror and figure out how do we discipline ourselves and self-police ourselves to be able to balance investing in research and development and innovation — and pricing our medicines responsibly,” Saunders said. “Allergan is going to be a different kind of company, that’s going to put the social contract with patients and physicians in front of all of our business decisions. And in doing so, we can run one of the most successful growth pharma companies in our industry.”
The pharmaceutical industry is under intense scrutiny by patients and politicians for price increases, concerns which have most recently flared into outrage about the ever-increasing list price of the lifesaving allergy injection, EpiPen. The industry has said the companies that jack up prices of old drugs are generally outliers, and that some high prices are necessary to fund the risky and expensive science the industry does to launch new drugs.
In his statement, Saunders said the overall net prices of drugs after rebates will increase “slightly above the …