There's Nothing Deflationary About Viagra

There’s no sign of deflation when it comes to Viagra. Pfizer (PFE) has hiked the price tag of its erectile dysfuncton treatment a stunning 108% since the initial launch in 1999. They’ve done this in spite of competition from Eli Lilly’s (LLY) Cialis and Bayer’s Levitra.

Interestingly, as pointed out by AccessRx, Pfizer not only increased the size of its price hikes, but also increased the frequency.

BNET Pharma: Pfizer was initially content to take price increases of 3 per cent per year, in 2003 it doubled that increase. In January 2009, Pfizer bumped it up to 11 per cent. Then in August it took another 5 per cent.

Viagra Pricing Power

Some might see this story as a microcosm of the overall healthcare cost problem. Yet Pfizer’s aggressive pricing strategy may have actually backfired.

Recent Viagra sales growth trailed that of Cialis by a wide margin due to its rising cost. In the second quarter of this year, Viagra sales only grew 4% year over year vs. 16% for Cialis. Thus Pfizer may have pushed the price of Viagra a bit too far, given that it’s now almost $15 a pill. That’s more than dinner.

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