CEO of Botox maker vows to limit price hikes

Life-saving drugs are getting more expensive
Life-saving drugs are getting more expensive

The recent spate of controversial drug price hikes have a new and unexpected critic: Brent Saunders, CEO of drugmaker Allergan.

In a blog post on the company's site Saunders said he agrees with critics of recent price hikes. Although he did not specify any drugmaker's pricing actions by name, he said: "I understand the public outcry and add my voice to the condemnation of these behaviors."

The most recent instance was the huge outcry over the 400% increase in the price of the lifesaving allergy drug EpiPens, made by Mylan (MYL).

Saunders pledged that Allergan (AGN) would not engage in "price gouging actions or predatory pricing." He said price increases for Allergan's own drugs will be less than 10% and limited to once a year.

Related: EpiPen main ingredient costs 'less than a Big Mac"

"Our expectation is that the overall cost of our drugs, net of rebates and discounts, will not increase by more than low-to-mid single digits percentages per year, slightly above the current annual rate of inflation," he said.

Saunders even vowed to move away from a common drug industry practice where a manufacturer jacks up prices as a drug's patent nears expiration.

"While we have participated in this industry practice in the past, we will stop this practice going forward," he said.

Related: How EpiPen came to symbolize corporate greed

Saunders defended drug pricing in the industry overall, saying it was necessary to fund the research costs needed to develop new drugs to improve the life of patients and keep down the price of treatment overall. He suggested that the price increases that have been getting so much public attention are being done by "outliers."

"In fact, all the people I know in the biopharma industry come to work because they have a dream of helping people," he said. "As the focus on price has heated up, the innovation ecosystem has come under assault, and it is fragile. This ecosystem can quickly fall apart if it is not continually nourished with the confidence that there will be a longer term opportunity for appropriate return on investment in the long R&D journey."

Related: Here's what happened to the AIDS drug that spiked 5000%

Allergan, best known for its drug Botox, was nearly acquired by Valeant (VRX), a company that has been criticized for rapid price increases. Valeant made an unsolicited $46 billion bid for the company in 2014. Instead, Allergan ended up being bought for $66 million by Actavis later that year.

Last year, it was nearly purchased by Pfizer (PFE) in a controversial $150 billion deal. The merger would have reduced Pfizer's U.S. corporate tax bill by having the combined company adopt Allergan's corporate home in Dublin, Ireland. But when the U.S. issued new rules designed to crack down on corporate tax avoidance, Pfizer called off the deal.

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