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Allergan CEO spells out "social contract" with public over drug pricing and access

It sounds refreshing, certainly, but the Devil is in the details

Scott Eric Kaufman
September 6, 2016 10:10PM (UTC)

In response to the recent scandals involving drug price hikes -- last month it was EpiPens, last year it was Martin Skreli -- Allergan CEO Brent Saunders penned what he called "Our Social Contract with Patients," in which he argued that such predatory pricing violates "a long-standing unwritten social contract with patients, physicians, policy makers, and the public at large."

Whether such a contract ever truly existed -- hundreds of years of hucksterism and snake-oil salesmen hints otherwise -- and even if this is little more than a cynical move by a savvy CEO attempting to corner the market on social responsibility, after years of hearing pharmaceutical companies and their various representatives complain about the unseen costs of their industry and the necessity of gouging the prices of life-saving drugs in order to continue further research, it is at the very least refreshing.


After referring to the Martin Shkrelis of the industry as "outliers" and condemning their behavior, Saunders complains that these bad eggs "have shifted attention away from the increasingly vibrant medical innovation ecosystem focused on finding new medicines, improving outcomes for patients and, by doing so, lowering the overall cost of [fighting] disease." Modern medicine is more effective and less expensive, he said, because of medical innovation, which is why the first leg of his social contract is that companies need to be "committed to risking billions of dollars to develop life-enhancing innovations."

The second is to make "these branded therapeutic treatments accessible and affordable to patients while also ensuring that we can continue to meet our ‘invest and innovate’ obligations outlined in Principle 1" -- which is a more polite phrasing of the long-standing pharmaceutical justification for refusing to allow for generic applications of their drugs. Future innovation is funded by past successes, therefore companies ought to be able to profit mightily on new drugs, in order that they might continue to produce even newer ones.

However, he did note that where Allergan does "increase price on our branded therapeutic medicines, we will take price increases no more than once per year and, when we do, they will be limited to single-digit percentage increases." Which, if true, would be fantastic -- even if "single-digit percentage increases" could still far outstrip inflation or the rising cost of living, to which he suggested they would be tied.

The third leg of his social contract involves ensuring quality control over the drugs his companies produces, but it's the fourth that's of more interest, as it states that "[w]e are committed to appropriately educating physicians about our medicines so that they can be used in the right patients for the right conditions." Which, of course, translates to a continuation of the status quo in which drug company representatives appear in doctor's offices across the country to convince them of the superiority of this or that medication.

In short, the entire letter sounds refreshing, but all Saunders promises here is that Allergan will work to maintain the very status quo its own CEO claimed isn't working.

Scott Eric Kaufman

Scott Eric Kaufman is an assistant editor at Salon. He taught at a university, but then thought better of it. Follow him at @scottekaufman or email him at skaufman@salon.com.

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Allergan Brent Saunders Business

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