AstraZeneca announces price freezes while earnings drop by 28%

The Anglo-Swedish drug maker AstraZeneca has joined Pfizer and others in halting price hikes until the end of 2018.

AstraZeneca Chief Executive Pascal Soriot announced that the company would match commitments made by Pfizer, Novartis, Roche and Merck stating that: “There is a clear commitment in the company to not increase prices in the second half of the year.”

However the announcement comes as the multinational firm declared that second quarter earnings had dropped by 28%. The loss of earning has been linked to the reduction in sales of the cholesterol treatment Crestor, which declined by 40%, as the drug lost patent protection in Europe and Japan.

The move comes as Trump’s campaign against constant price hikes takes hold. Nevertheless, although Trump made lowering drug prices a major campaign issue in 2016, the recent price freezes have come into question, as critics suggest that they may not be as meaningful as they appear. While observers noted that MSD’s price reductions were on already unprofitable drugs, it was pointed out that Roche had announced their price freezes immediately after hiking prices by an average of 3%.

As such the real impact is yet to be seen. Analysts have suggested that the 2018 price freezes could provide additional leeway for higher price hikes next year.

Louis Goss