Wall Street concerns about anti-inflation price negotiations for the first 10 drugs in Medicare Part D plans appear to be fading.
As the Sept. 1 announcement date approaches, executives at big pharmaceutical companies are signaling they are open to any eventual price cuts set by the federal government.
On earnings calls in the past few weeks, several major pharmaceutical companies have mentioned the final prices they have agreed to with the Centers for Medicare and Medicaid Services (CMS), known as maximum fair prices (MFP), but have not provided specific figures.
Bristol-Myers SquibbBe MeThe company’s blockbuster blood thinner Eliquis is also on the list. The company confirmed that it is receiving maximum fair pricing from CMS and that the impact on revenue is manageable.
“Now that we know the final price, we are increasingly confident in our ability to navigate the impact of the IRA on Eliquis,” Chief Executive Officer Christopher Boehner said in an earnings call on Friday.
Eliquis brought in $3.4 billion in revenue for the company in the second quarter, up 7% from a year ago, while the company contributed $12.2 billion., That represents nearly a quarter of BMS’ 2023 revenue of $45 billion.
Last week, Johnson & JohnsonJ.N.J.On its earnings conference call, analysts asked about the expected impact of the IRA on its drugs, the immunosuppressant Stelara and the blood thinner Xarelto. Jennifer Taubert, executive vice president and worldwide chair of Innovative Medicines, said the company opposes the process but that J&J won’t need to change its guidance once the price is known.
“Those numbers were included in the guidance that we provided. They still look very good to us today. They’re very consistent today,” she said.
Stelara, which is off patent next year, had second-quarter sales of nearly $2.9 billion, up 4.9% from 2018, while Xarelto sales were $587 million, down 7.9% from 2018. The two drugs could bring in combined revenue of $13.2 billion in 2023, but Xarelto sales declined year over year.
BMS and J&J sued the government, claiming that the IRA mandate was unconstitutional. The lawsuit was dismissed in court. Both have vowed to appeal..
The real bottom line? Investors are rejoicing. “Taken together, these factors suggest a more reasonable discount than feared around IRAs,” JPM analyst Chris Schott said in a Friday note.
Anjali Khemrani Anjali is a senior health reporter at Yahoo Finance, covering everything from pharma, insurance, long-term care services, digital health, PBMs, health policy & politics, etc. Follow Anjali on all social media platforms. translation:.
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