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In a bold move, Allergan chief executive Brent Saunders on Tuesday issued a manifesto promising to avoid “price gouging” as part of a “social contract” with the public. His company will limit price increases on branded drugs to single digit percentages per year in most cases, he wrote.  The move comes amid growing national anger over prescription drug prices — most recently fueled by the EpiPen controversy — and ensuing outcries from Washington lawmakers. We spoke with Saunders about his plan and the extent to which it can make a difference. This is an edited version of our conversation…

Pharmalot: So your plan is a voluntary effort. Why should we believe it will stick? In the 1990s, pharma CEOs agreed to keep price increases at or below inflation, and we see what happened.


Saunders: I’m only the CEO of Allergan and what I can tell you is that it’s real for Allergan. In the current environment, and for the foreseeable future, our customers will hold us accountable to this commitment. They’re all aware and we’ll talk to them about it and build it into our agreements with price protection clauses.

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  • I am glad you asked your Q1. However, if you can collect those pledges of those CEOs from 1990s and now ask the current CEOs who have not followed those pledges (of their predecessors) “what happened? no institutional memory?”

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