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Pharma PricingIt did not take long.  In the midst of the pricing debacle created by Mylan and the EpiPen, one bold CEO has stepped forward.   Brent Saunders, Allergan’s leader, has taken a clear stand.  Writing on his CEO blog, Saunders tackles the elephant in the room.[1] According to Saunders, “those who have taken aggressive or predatory price increases have violated [the] social contract.”  That social contract is between the pharmaceutical industry and the groups it serves; especially patients.  Saunders brands those who have violated that contract as “outliers.”

Saunders’ Concrete Solutions

He, however, goes further.  He outlines concrete solutions that Allergan will take to address the problem.  These solutions include:

  1. Pricing products based on the value they create,
  2. Avoiding price gouging or predatory pricing,
  3. Limiting price increases as to both frequency (once per year) and amount (slightly above the annual inflation rate),
  4. Avoiding major price increases when products near patent expiration, and
  5. Disclosing the impact of price on the company.

Challenging Compliance Officers

He is not just pressuring other pharma CEO’s to follow suit, Saunders, a former compliance officer himself, is challenging pharma compliance officers to step forward too.  As I discussed in a previous post, we must now “show” the public that our companies are “walking the talk” and are truly committed to this ethical path.[2]  While this path seems alien, with leaders like Bren Saunders, it is both an achievable and necessary path.  I support his bold stance and believe now is the perfect time to start making his solutions a reality at all pharma companies.


[1] Brent Saunders, Our Social Contract with Patients, Allergan CEO Blog (Sept 6, 2016) at http://www.allergan.com/NEWS/CEO-Blog/September-2016/Our-Social-Contract-with-Patients.

[2] Seth Whitelaw, Pricing – The Next Alamo, Whitelaw Compliance Group Blog (Aug 31, 2016) at http://www.whitelawcompliance.com/blog/drug-pricing-the-next-alamo/.