Roche Takes Drug-Price Posturing to New Heights

Drug companies are falling over themselves with plans to halt or defer price increases to get on Donald Trump’s good side. They seem to believe his approval comes cheap. 

Pfizer Inc. started things off earlier this month by agreeing to roll back mid-year price hikes and delay them — for a few months. Similar efforts announced this week by Novartis AG and Merck & Co. arguably won’t be any more consequential. But Roche Holding AG takes the cake by promising to not raise prices for the rest of 2018, shortly after it hiked prices for the second time this year on its biggest drugs.

In a statement Friday, the Swiss pharmaceutical giant said it told the Health and Human Services Department on July 11 that it wouldn’t enact any more price hikes in 2018. The full statement is appended below.

 The thing about it is, Roche had just passed along price hikes on nine drugs, including the biggest medicines in its portfolio, at the beginning of July. 

Based on its recent practice, the next time Roche would likely raise prices on the drugs — Rituxan, Herceptin, Avastin, Perjeta, and Actemra, accounting for more than 60 percent of its drug sales — would be the beginning of next year, according to data from Bloomberg Intelligence and First Databank. In other words, Roche promised not to take new price hikes until … the next time it would likely raise prices anyway. Truly heroic.

Good Timing!

Roche’s price increases for its breast cancer medicine Herceptin demonstrate its typical pattern for its biggest drugs

First Data Bank/Bloomberg Intelligence

This isn’t to say that Roche should be a scapegoat. It is relatively modest in its increases, and has priced some newer drugs below older alternatives. And while its policy likely won’t have any major impact on the firm’s sales, it could conceivably delay hikes on a few smaller drugs.

That said, Friday’s announcement is a particularly glaring example of how little these pricing shifts mean.

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