Pricing has been an active topic within the pharmaceutical industry for some time.

On 27th June, the US Food and Drug Administration (FDA) announced its plans to expedite the review of generic drug applications in therapy areas where drug availability is scarce. These measures are based on an idea championed by the newly appointed FDA commissioner Scott Gottlieb, whose plan is to reduce drug prices by making it easier for cheaper generic drugs to be brought to market, improving competition among cheaper generic products.

Gottlieb has repeatedly criticised the current system where patent protection allows pharmaceutical manufacturers to enjoy 'monopoly in perpetuity'. Earlier in the year, the Trump administration also promised to reduce drug prices, although no specific plans on how this will be achieved have been laid out yet.

Despite the uncertainty around future changes in policies and regulations, a number of companies including Allergan, AbbVie, and Sanofi have already pledged to limit their annual price hikes to less than 10%. Eli Lilly has also offered a large discount on its lead insulin product for patients who are exposed to the full price of the drugs. Drug pricing is increasingly becoming scrutinised by the public and policy makers and expectations are rising for manufacturers to be transparent about their pricing strategies. 

The importance of reporting pricing strategies openly is evident from the strong criticism currently aimed at Pfizer following its announcement that it has raised the US price of more than 100 drugs in 2017. At a time of public outrage over the rising cost of drugs, the firm’s decision goes against the growing trend of companies pledging to limit price hikes and improve transparency.

There is also heightened scrutiny from the public and policy makers following Martin Shkreli’s decision to raise the price of an AIDS drug by 5,000% in 2015 and the pharmaceutical industry as a whole is expected to take actions. For manufacturers, it is not only important to make more clinical data and pricing rationale available to the public, but also to collect robust clinical data on candidate drugs so that strong value propositions can be developed to support their drug pricing decisions.