Pfizer Backs Down from Drug Price Hike After Trump's Twitter Lashing

The company had appeared to weather criticism from the White House when it announced it would backpedal from the July 1 increases.

In a surprising reversal, pharmaceutical giant Pfizer said Tuesday it would back down from planned price hikes for several dozen of its drugs amid heavy criticism from the White House.

After weathering a one-two punch Monday from the president and his Health and Human Services secretary, who took turns publicly lambasting the company, Pfizer appeared to have escaped unscathed, at least in terms of its performance on Wall Street.

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The company's stock dipped after President Trump tweeted Monday afternoon that it and other pharma firms "should be ashamed that they have raised drug prices for no reason." But shares rebounded to close the day up slightly, as Bloomberg reported.

Pfizer closed even higher on Tuesday, up another 0.75% to $37.43, suggesting perhaps that Trump's blunt words don't make investors quite as nervous as they did 18 months ago, when the then-president-elect accused drug companies of "getting away with murder"—part of a message that knocked biotechnology shares down about 3%, as Politico reported.

More broadly, this episode could indicate a heightened sense of skepticism in response to the Trump administration's commitment to bring down drug prices.

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"Trump can threaten all he wants. He figures such posturing looks good to his base. But his ranting simply reveals an inability to accept that delivering on his promise will be much harder than he realized," Ed Silverman wrote for STAT News.

Even so, Pfizer responded to the criticism after markets closed Tuesday by backpedaling on price hikes that took effect July 1.

The increases affected list prices on 41 products, or about 10% of Pfizer's portfolio of medicines and vaccines, as Reuters reported. But the company said the prices would revert to their pre-July 1 levels "as soon as technically possible" and that they would stay there until the end of the year or Trump implements his initiative to dampen high drug prices, whichever comes first, as The Wall Street Journal reported.

• Blueprint defied: Pfizer's price hike came after the White House unveiled its blueprint in May to bring down prescription drug prices, defying Trump's claim that some of the biggest drug makers would be announcing "voluntary massive drops in prices."
   
• One-two punch: HHS Secretary Alex Azar, who has defended the White House's outline in the two months since it was unveiled, piggybacked Monday on Trump's Pfizer criticism. During a speech at the 340B Coalition Summer Conference, he specifically mentioning the president's tweet and suggested recent price hikes could create "a tipping point in U.S. drug pricing policy."

After finishing his speech, Azar reiterated the message on Twitter: "Change is coming to drug pricing, whether painful or not for pharmaceutical companies," he wrote, with a link to Trump's earlier tweet.

In a subsequent tweet Tuesday evening, Trump broke the news of Pfizer's reversal: "We applaud Pfizer for this decision and hope other companies do the same."

Azar followed up with a statement of his own, flattering both Pfizer and Trump: "I look forward to working with Pfizer and others who share the President’s concern for patients, and that want to work with us to lower list prices and reduce out of pocket costs," he said.

This latest move by Pfizer is temporary and does not address prior price hikes, which left some industry analysts unimpressed, as CNN Money reported.

Editor's note: This story has been updated throughout to account for developments Tuesday in which Pfizer said it would back down from its July 1 hike. The original headline for this story, "Pfizer Unfazed by Trump's Twitter Lashing," has been updated accordingly.