Pfizer at Bernstein Conference Notes

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Ian Read – Chairman and Chief Executive Officer

Insurance companies can’t deny access so they are raising co-pays to avoid adverse selection

“I mean we are in a political season, we are in the election season, there is a lot of rhetoric around drug pricing, it has been exacerbated I believe by the ObamaCare and the changes made in the marketplace, so you are seeing insurance companies avoiding adverse selection. They can’t do it by not covering, so now they are trying to do it by applying large co-pays and all coinsurance to avoid adverse selection in the risk pool. This has been bringing up a lot of questions around the cost to the consumer of their drug benefits. So it is not a really pharmaceutical pricing, it is rarely a change in the way the insurance industry is dealing with access.”

Macro is the largest risk for Pfizer

“for Pfizer, the macro, I think the macro environment is the largest risk”

Very optimistic in industry pipeline

“I am very optimistic. I think, certainly in oncology and in vaccines the biology is broken we’re really beginning to understand the science becoming more profound. I think you’re going to see a sustained uptick in both rare diseases and oncology and in vaccines, and I think the neuroscience is potentially the next oncology area, but probably not a near term opportunity in neuroscience because there is a lot of research going into that and I think it will break the same way as oncology.”

Pricing is more severe because insurance companies can no longer adjust risk pools by selecting patients

“Yeah, I do think it’s more intense and it’s more intense because of ObamaCare because the insurance companies can no longer adjust their risk pools by the way they select patients. And so I think you are going to have to see some type of reform of ObamaCare in the next presidential cycle.”

Medicines are the most efficient way of dealing with healthcare costs

“The pressure on – increasing in the increases of the premiums, people pulling out of the marketplace, there is going to have to be some change. And when there is some change, there is always a possibility of society looking around and saying we want to reorganize how we pay, who pays for healthcare, but the reality is that, from a public policy point of view, medicines are the most efficient way of dealing with healthcare costs.”

Most focused on who will control congress

” I’m not sure that I can, at this moment, distinguish between the policies that the Donald Trump may support or those that Hillary Clinton may support, so I’m sort of more focused really on understanding where the house control is going to be, where the senate control is going to be.”

An inversion would probably be impossible in this environment

“I think the administration has made it clear they will do whatever it takes to stop an inversion. So it would have be to – I mean, I said, nothing is off the table, but the inversion would have to be so clean and to be – probably impossible on the present environment.”

The prices of biotech have realigned but I’m not sure that management have readjusted yet

” the prices of biotech have realigned to somewhat. I’m not sure that even now management and shareholder expectations in biotech have readjusted to the alignment.”

Cancer is not a significant healthcare cost in the US

“I think total cancer costs 1% of the healthcare cost in the United States. If you get the numbers 1% or 4%, I never remember, it’s 1%. So cancer is not a major driver of cost”