Pfizer blasts Trump’s pricing plans, threatens to pull US investments

CEO Albert Bourla says Pfizer will rethink plans to invest in US R&D and manufacturing after lambasting four executive orders aimed at reducing drug prices unveiled last week.

Like most areas of society, Big Pharma’s relationship with US President Donald Trump has been tumultuous. Initial fears of a clampdown on drug pricing through promises to ‘drain the swamp’ were abated through Trump cozying up with the sector once in office. And reforms passed by Congress in 2017 through the ‘Tax Cuts and Jobs Act’ reduced corporation tax from a top level of 35% to 21%, and made it affordable for US firms to repatriate cash held overseas, stoking a flurry of pharma investments.

But those investments are now at risk, said Pfizer CEO Albert Bourla yesterday, after the White House unveiled four executive orders last week targeting drug prices.

Image: iStock/ADragan

“Overall, I’m disappointed by these executive orders. They pose enormous distraction at a time where the industry needs to be completely focused on developing a potential COVID-19 vaccine or treatment. The international price index is radical. Not only it is imposing socialized medicine to America, it also will create uncertainty and could lead to job losses,” Bourla told stakeholders during Pfizer’s second quarter results.

“We have plans to invest in both R&D and manufacturing in the United States. If finalized, these new executive orders could force us to rethink those plans, consider job reductions and add to the economic and health anxiety already widely felt in our country.”

Bourla did not refer to the exact investments, but approximately $5 billion was earmarked in 2018 by Pfizer to invest in US manufacturing. And last year, the firm announced a $50 million expansion in Sanford, North Carolina to support its gene therapy network.

The four executive orders, though not finalized, aim to reduce drug prices by: Allowing states, wholesalers, and pharmacies to import FDA-approved drugs from foreign countries and sell them in the US; Use the lowest price among other economically advanced countries to set what Medicare pays for certain drugs administered in a physician’s office; Direct federally funded community health centers to pass on discounts for insulin and EpiPens directly to low-income patients; and ensure that rebates currently paid by drugmakers to benefit managers and insurers get passed directly to patients when they buy a medication.

“The one concept we agreed with is the rebate rule because it will actually make the system work better by removing inefficiencies created by the middleman,” said Bourla. “It will ensure our discounts make it to patients. The patients are the ones that drive the volume of our medicines and in effect, earn the volume discounts we provide to middlemen. The problem has been that most of these discounts don’t make it back to the patients.”

Pfizer is not alone in its criticism of the orders. Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization (BIO) have both issued statements criticizing the White House’s plans.

Meanwhile, Trump has double downed on his attack of Pharma through his preferred medium Twitter, slamming unspecified adverts from unspecified pharma firms on Tuesday.

Full spike protein selection

The other major takeaway from yesterday’s call was news on Pfizer’s potential COVID-19 mRNA vaccine, in development with Germany’s BioNTech.

The collaboration has made a surprise choice in its vaccine candidates to progress into Phase II/III studies, selecting BNT162b2, designed to get cells to produce the full spike protein of the novel coronavirus as a way to spark immunity.

Published preliminary Phase I data for BNT16b1, a candidate that codes for one piece of the spike protein called the receptor binding domain, had led to many commentators to assume this candidate would be the one chosen to advance.

Xconomy reports: Pfizer and BioNTech’s vaccine candidate selection means that all of the leading COVID-19 vaccine companies are targeting the spike protein, according to the SVB Leerink note. The analysts are awaiting Phase II and III efficacy data to compare the mRNA candidates. Early data so far suggest that the Pfizer/BioNTech vaccine candidate elicits stronger T cell responses than Moderna’s candidate, the analysts wrote. If that stronger response holds up, and if that response proves to be critical for conferring immunity across a broader population, the Pfizer and BioNTech candidate could have an edge.

If the Phase II/III study is successful, the companies say an application seeking emergency authorization or other form of regulatory approval could be filed as early as October. If given the green light, they say that they can produce up to 100 million doses by the end of the year, ramping up to 1.3 billion doses by the end of 2021.