Drug Discovery and Development

  • Home Drug Discovery and Development
  • Drug Discovery
  • Women in Pharma and Biotech
  • Oncology
  • Neurological Disease
  • Infectious Disease
  • Resources
    • Video features
    • Podcast
    • Webinars
  • Pharma 50
    • 2025 Pharma 50
    • 2024 Pharma 50
    • 2023 Pharma 50
    • 2022 Pharma 50
    • 2021 Pharma 50
  • Advertise
  • SUBSCRIBE

Insider Q&A: Allergan CEO on Impact of Limiting Price Hikes

By LINDA A. JOHNSON , AP Medical Writer | March 3, 2017

As drugmakers pushed back against rising criticism over sky-high U.S. prescription drug prices, one pharmaceutical company went public with a pledge.

Brent Saunders, CEO of Botox maker Allergan PLC, last September announced a new “social contract” under which the company would limit annual list price increases for its drugs to below 10 percent.

After deducting the discounts insurers and other payers get off the higher list price, Allergan will receive net price increases of around 2 percent to 3 percent on its drugs, Saunders said. Several companies have followed suit, pledging annual increases below 10 percent. Others said that’s been their practice, though most have generally been raising prices just under that benchmark.

Allergan, which is based in Dublin but operates from its U.S. headquarters in Parsippany, New Jersey, also sharply boosted financial aid for eligible patients.

In a recent interview, Saunders said his executive team, board and long-term investors supported his move. He said the strategy also helps Allergan, forcing it to plan for the future, focus on internal drug development and make deals to get promising experimental drugs from other companies. His comments have been edited for clarity and length.

Q: Why did you make this social contract?

A: I’ve always believed the industry has a societal obligation to invest in new drug discovery and to make drugs affordable and accessible to patients. I wanted to really take a bold step. We need to solve this issue, or the government will for us.

Q: How does restraining price increases improve Allergan’s prospects?

A: You can get complacent as a company if your growth is predominantly through price increases. If you think beyond one quarter, it’s good for business.

Q: How does limiting price hikes do that?

A: It forces you to stay sharp and competitive in innovation and operational excellence. You focus on your pipeline with (patent expirations) in mind, so if your big drug’s patent is ending, you need three to four R&D programs that, if successful, can cover that and provide growth.

Q: How will you accomplish that?

A: We’re going to invest to find cures and treatments needed in areas including depression, Alzheimer’s and diabetic gastroparesis (a disorder that causes vomiting, abdominal pain and bloating, and limits absorption of food and medicines).

Q: What else is key to Allergan’s strategy?

A: Instead of being a big, sprawling company with various brands, we picked seven areas where we can be best in class. We have scale and depth of expertise in those, and we’re No. 1 or 2 in four of them (eye care, medical aesthetics, gastroenterology and central nervous system disorders).

Q: What should the industry do to address the drug price issue?

A: Across the whole health care system, we need transparency on prices and a level playing field. These things can happen over the next couple years.


Filed Under: Drug Discovery

 

Related Articles Read More >

Lokavant’s Spectrum v15 uses AI to cut trial-feasibility modeling from weeks to minutes
Prime time for peptide-based drug discovery 
Why smaller, simpler molecular glues are gaining attention in drug discovery
Glass vial, pipette and woman scientist in laboratory for medical study, research or experiment. Test tube, dropper and professional female person with chemical liquid for pharmaceutical innovation
Unlocking ‘bench-to-bedside’ discoveries requires better data sharing and collaboration
“ddd
EXPAND YOUR KNOWLEDGE AND STAY CONNECTED
Get the latest news and trends happening now in the drug discovery and development industry.

MEDTECH 100 INDEX

Medtech 100 logo
Market Summary > Current Price
The MedTech 100 is a financial index calculated using the BIG100 companies covered in Medical Design and Outsourcing.
Drug Discovery and Development
  • MassDevice
  • DeviceTalks
  • Medtech100 Index
  • Medical Design Sourcing
  • Medical Design & Outsourcing
  • Medical Tubing + Extrusion
  • Subscribe to our E-Newsletter
  • Contact Us
  • About Us
  • R&D World
  • Drug Delivery Business News
  • Pharmaceutical Processing World

Copyright © 2025 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search Drug Discovery & Development

  • Home Drug Discovery and Development
  • Drug Discovery
  • Women in Pharma and Biotech
  • Oncology
  • Neurological Disease
  • Infectious Disease
  • Resources
    • Video features
    • Podcast
    • Webinars
  • Pharma 50
    • 2025 Pharma 50
    • 2024 Pharma 50
    • 2023 Pharma 50
    • 2022 Pharma 50
    • 2021 Pharma 50
  • Advertise
  • SUBSCRIBE