Novartis Joins Pfizer in Bowing to Trump by Freezing Drug Prices

Novartis, the Swiss drugmaker, said Wednesday that it would not raise prices on its U.S. products for the rest of 2018, joining Pfizer, which delayed its increases last week after President Donald Trump singled out the company for criticism.

Novartis’ chief executive, Vas Narasimhan, said during an earnings call with investors that the company had made the decision in June, amid escalating outrage over high drug prices.

“We thought that was prudent, given the dynamic environment we’re currently in,” he said.

A spokesman for Novartis said the company notified the state of California, which has a new drug-price transparency law, of its decision in June but the news was not widely known.

Novartis’ stock was trading at about $80 at midday Wednesday, up 2.35 percent.

Pharmaceutical companies are scrambling to stem the groundswell of criticism over steep drug pricing, as elected officials and the Trump administration have taken up the issue. Earlier this year, the Trump administration released a detailed plan, and the proposal has generated more than 2,000 comments from a range of interest groups that submitted their opinions before a federal deadline Monday.

At a bill-signing in May, Trump said that major drug companies would, within two weeks, enact “voluntary massive drops” in prices, a statement that was met with puzzlement within the industry. The president’s prediction did not materialize.

Last week, after reports that Pfizer was raising prices by nearly 10 percent on many products, including widely used drugs like the pain reliever Lyrica, Trump slammed the company on Twitter.

The next day, Pfizer’s announcement that it would hold off on the price increases was rewarded with a glowing presidential tweet, which concluded: “Great news for the American people!”

Narasimhan did not meet directly with Trump, but the company said it had been in touch with the Health and Human Services department over the administration’s plan to lower prices. That department is headed by Alex M. Azar II, a former executive at the drugmaker Eli Lilly.

Novartis’ decision follows its entanglement with the administration over revelations in May that the company paid $1.2 million to Trump’s former personal lawyer, Michael Cohen, as a political consultant. Although Novartis previously said that it did not ultimately rely on Cohen’s services, a report released last week by Senate Democrats concluded the relationship went deeper than the company had previously acknowledged. Novartis has disputed that it misrepresented its relationship with Cohen. The company has said it spoke to lawyers for the special counsel, Robert Mueller, who is examining Russian interference in the 2016 presidential election, and that it considers its role in that investigation to have ended.

Nevertheless, Narasimhan has sought to distance himself from the controversy, noting that Cohen was hired by his predecessor, Joe Jimenez, and describing the arrangement as a “mistake.” In May, the company announced that its top lawyer, Felix R. Ehrat, was retiring over the issue.