Novartis joins Pfizer in deferring drug-price hikes

Novartis on Wednesday became the second major drug maker to defer price increases for the rest of the year, citing a “dynamic environment” in the U.S. as President Trump attempts to swat away critics and use market-based pressure to bring costs down.

The Swiss company follows Pfizer, Inc., which recently postponed price increases from July 1 to Jan. 1. Mr. Trump took a victory lap at the time, because he’d singled out the company on Twitter and spoken to the CEO, and his top health official called Novartis’ decision a “win” for patients.

Both companies, however, are deferring increases instead of delivering the “voluntary, massive drops” in prices that Mr. Trump predicted in May.

“We thought the prudent thing to do was to pull back on any further price increases in 2018 and evaluate as the environment evolves,” Novartis CEO Vasant Narasimhan told Bloomberg television.

He said moving forward, Novartis will price its medicines based on the “value they deliver” and will look at price increases in line with medical inflation across the industry.

Novartis’ net prices, after rebates are considered, have actually fallen for U.S. consumers, he said.

Mr. Narasimhan said he is looking forward to the implementation of Mr. Trump’s recent blueprint for slashing drug prices, though he’s more focused on the “overall policy environment” in the U.S. than handing the White House a win.

The administration’s blueprint ignored Democrats’ pleas to let the government negotiate drug prices directly under Medicare, even though Mr. Trump touted the idea during the 2016 campaign.

The administration says the plan will empower private plans in Medicare Part D to negotiate down prices instead, while other changes will spur competition to bring prices down.

In the meantime, Mr. Trump appears ready to use his bully pulpit to pressure individual companies on their pricing.

A day before Pfizer decided to suspend its price hikes, Mr. Trump used Twitter to say the company “should be ashamed that they have raised drug prices for no reason,” and then spoke to the CEO directly.

While there was no indication that Novartis’ executives spoke to Mr. Trump, the company has been conferring with the Health and Human Services Department.

“From the beginning HHS has been in contact with relevant stakeholders throughout the process and has engaged them on the blueprint as that comment period came to a close yesterday,” agency spokeswoman Caitlin Oakley said. “The president and the secretary have been clear that prescription drug price increases must stop.”

Health Secretary Alex Azar tweeted that Novartis’ decision was “a step in the right direction and a win for American patients.”

Yet advocates said companies that raised prices for years shouldn’t be cheered for taking a breather in 2018.

“Let’s keep reality in focus: Drug companies don’t get credit for keeping prices high,” said Ben Wakana, a former HHS spokesman under President Obama and executive director for Patients For Affordable Drugs, which is pressuring 2018 candidates to bring down costs. “Novartis and Pfizer temporarily postponed regularly scheduled price gouging — they didn’t reduce prices or increase patient access. The bar for giving drug corporations credit for good behavior cannot be this low.”