Much less than meets the eye in Trump-Pfizer deal on prices

Big Pharma company looks like the main beneficiary of an agreement touted as 'a massive win.' Most Americans won't benefit.

- MICHAEL HILTZIK COLUMNIST

If you had nothing better to do on Sept. 30, you might have tuned in to a White House event at which President Trump, standing side-by-side with Albert Bourla, the chief executive of Pfizer, announced a deal with the big drug company that was described from the podium as “a massive win for the American people.”

Under the deal, according to the administration, Pfizer will sell its drugs to Americans “at a deep discount” from their list price. Pfizer, for its part, said the arrangement ensures that “U.S. patients pay lower prices for their prescription medicine.”

As is the case with so many pronouncements issued from the Trump White House, there’s much less to this deal than meets the eye. Whether it will effectively reduce spending on prescription drugs for most Americans — or any Americans — is highly doubtful.

For Pfizer, however, this is a fabulous deal — never mind that the news media has portrayed it just as the White House and Pfizer hoped, as a major concession by the company to help the average consumer.

The truth is that the company won't be suffering any significant reduction in revenue or profits by offering these “discounts.” It will, however, be exempted for three years from tariffs of 100% that Trump had threatened to impose on drugmakers.

How do we know that Pfizer is the principal beneficiary of the deal? Its stock price has risen nearly 15% in the five trading days since the announcement. Do you think that a deal that cut consumer prices for a company’s most popular products would really produce a stock market gain? Me neither.

Accordingly, it’s proper to take a close look at what we know, and more importantly, what we don’t know, about this deal.