While drug giant Pfizer Inc. in 2017, increasing the price of dozens of drugs, it also increased CEO Ian Read’s compensation by 61 percent, bringing his total compensation to $27.9 million, according to financial data reported by Bloomberg.
The Pfizer board reportedly approved the increase in compensation because they saw it as a “coercive incentive” to prevent Read from retiring. He will turn 65 in May. As part of the deal, Read must stay on at least until March and after that he is not allowed to work with a competitor for at least two years.
According to Bloomberg, Read’s compensation included, in part, a $1.96 million salary, a $2.6 million bonus, $13.1 million in stock awards tied to financial goals and stock price, as well as an $8 million special stock prize that vests if the company’s average stock yield rises above 25 percent for 30 consecutive trading days before the end of 2022.
In 2016, Read’s fee was $17.3 million.
The 61 percent increase comes after a series of separate reports of drug price increases by Pfizer. In January, FiercePharma reported an analysis showing that Pfizer made 116 price increases between December 15 and January 3 of this year. The price increases ranged from 3 percent to 9.46 percent. The analysts noted that Pfizer increased the price of 20 drugs by 9.44 percent. Those include Viagra, Pristiq, Lipitor, and Zoloft, which are available as generics, as well as Chantix.
In addition, Pfizer had increased the prices of 91 drugs by an average of 20 percent in the first half of 2017, according to data first reported by the Financial Times. That included two waves of price hikes, one in January and the other on June 1.
That mirrors the pattern seen in 2016, 2015, and 2014, according to a report from STAT. In June 2016, Pfizer increased the list prices of its drugs by an average of 8.8 percent. That followed an average price increase of 10.4 percent in January of that year.
In response to the price hikes reported earlier this year, a Pfizer spokesperson told FiercePharma that the company is “taking a considered and responsible approach to pricing.” The spokesperson added that Pfizer offers assistance programs to some eligible patients with financial difficulties. However, such discount and assistance programs don’t stop insurance companies from taking up larger tabs, contributing to higher premiums and system-wide costs.
Pfizer did not immediately respond to a request for comment from Ars.
The price hikes come amid a national outcry over the high prices of medicines and health care in general. A recent analysis published in JAMA compared health care spending in the US with 10 other high-income countries. It turned out that the US paid almost twice as much, but underperformed. The main drivers of higher prices, researchers found, were high administrative costs and devices and expensive drugs.