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Pfizer and Other Drugmakers Still Raise Drug Price Despite Criticism

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January 12
3:02 AM 2016

Pfizer Inc., Amgen Inc., Allergan PLC, Horizon Pharma PLC and other pharmaceutical companies still hike the price of their products in the U.S. Although receiving criticism from lawmakers, politicians and health organizations, but the companies does not budge from their decision because they hold the pricing power in their hand.

Among the drugs are the life-saving drugs such as pneumonia vaccine which its sales alone generating more than $4 billion dollar for Pfizer. Doctors Without Borders, an international and independent medical humanitarian organization are one of the most dependent of the vaccine. In November last year, the organization dumped $17 million of fake money outside the Pfizer hearquarter in downton Manhattan, New York City as a protest to price increase.

The price hike is enabled because drug price in the U.S. is beyond regulatory control. David Steinberg, analyst from Jefferies Investment Banking Firm told Wall Street Journal, "Unlike other countries, there's no mechanism whereby regulatory authorities can control price."

At the beginning of new year, Pfizer increased list prices of more than its 60 branded products at an average of 10.6%, with eight of the product went up at least 20%. According to Reuters, its heavily advertised Lyrica has 9.4% increase, while the erectile dysfunction drug Viagra is up 12.9%, and breast cancer drug Ibrance is upsurge by 5%. In U.S. market alone, Lyrica and Viagra are one of Pfizer's best-selling drugs, with $2.3 billion sales for Lyrica and $1.1 billion for Viagra.

Lyrica is a Pfizer trademark for pregabalin, a prescription drug to treat epilepsy, neuropathic pain, fibromyalgia and generalized anxiety disorder. Viagra is a trademark name for Sildenafil, a medicine to treat erectile dysfunction and pulmonary arterial hypertension.

In an email statement as quoted by Reuters, Pfizer said, "It is important to note that the list price does not reflect the considerable discounts offered to the government, managed care organizations, and commercial health plans and certain programs that restrict any increases above the inflation rate."

Pfizer is in the middle of merger plan with Ireland-based Allergan Plc that will create the largest drugmaker in the world and shift Pfizer's headquarters to Ireland. Many people including U.S. president Barrack Obama reprove the $160 billion merger and said the relocation of Pfizer headquarter to Ireland as unpatriotic. Presidential candidates from both Republican and Democrat,Donald Trump, Bernard Sanders and Hillary Clinton also slammed the merger plan.

The new company will be registered as Pfizer Plc to evade U.S. tax and according to Fortune, it would also be the biggest-ever instance of a U.S. company re-incorporating overseas to lower its taxes.

Pfizer and other pharmaceutical companies with pricing power have unlimited capacity to control the drug price in the U.S., because there is no regulation and law to control them.

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