Puma breaks the ‘social contract’

About three years ago, amid a now-familiar fervor over drug prices, Allergan CEO Brent Saunders committed to what he called a pharmaceutical “social contract,” promising not to increase prices by double digits more than once a year. Since then, grudgingly or otherwise, major drug makers have by and large followed suit, ushering in the age of the annual 9.9% hike.

Then there’s Puma Biotechnology. As STAT’s Ed Silverman reports, the one-product company has increased the price of the breast cancer drug Nerlynx by 20% over the course of nine months.

The Puma situation is an interesting case study. The company is struggling to meet its revenue targets and had to scale back its 2019 guidance. The prospects of expanding the label for Nerlynx are fairly limited. Thus, as Cowen analyst Chris Shibutani put it, “price increases would appear to be the familiar tool to reach for, unfortunately.”

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