廣告
香港股市 將收市,收市時間:6 小時 2 分鐘
  • 恒指

    18,896.72
    +69.37 (+0.37%)
     
  • 國指

    6,711.39
    +23.26 (+0.35%)
     
  • 上證綜指

    3,119.72
    -4.33 (-0.14%)
     
  • 滬深300

    3,624.21
    -11.50 (-0.32%)
     
  • 美元

    7.8076
    +0.0003 (+0.00%)
     
  • 人民幣

    0.9275
    +0.0001 (+0.01%)
     
  • 道指

    39,069.59
    +4.29 (+0.01%)
     
  • 標普 500

    5,304.72
    +36.88 (+0.70%)
     
  • 納指

    16,920.79
    +184.79 (+1.10%)
     
  • 日圓

    0.0496
    +0.0000 (+0.08%)
     
  • 歐元

    8.4900
    +0.0155 (+0.18%)
     
  • 英鎊

    9.9760
    +0.0090 (+0.09%)
     
  • 紐約期油

    78.76
    +1.04 (+1.34%)
     
  • 金價

    2,355.00
    +20.50 (+0.88%)
     
  • Bitcoin

    68,495.27
    -554.71 (-0.80%)
     
  • CMC Crypto 200

    1,486.40
    +2.21 (+0.15%)
     

Biden Administration targets drugs from J&J, Merck for controversial Medicare price negotiations

The Biden Administration this morning revealed the first 10 drugs for which Medicare will negotiate prices (which will go into effect in 2026) under the Inflation Reduction Act (IRA).

The drugs include:

The move has not yet hurt stocks of pharmaceutical giants like Merck (MRK), Johnson & Johnson (JNJ), Pfizer (PFE), and Bristol-Myers Squibb (BMY), whose stocks were flat in pre-trading Tuesday.

"Despite Big Pharma spending nearly $400 million in lobbying efforts last year alone, the Biden-Harris Administration will continue to fight for lower costs for American families and to make sure no American is denied essential care simply because of cost," a White House official said on background.

廣告

Of those companies whose drugs made the list, half have already filed suit against the government, including the US Health Department (HHS) and Centers for Medicare and Medicaid Services (CMS) and their respective leaders, in anticipation of the list targeting their drugs.

Eliquis, manufactured by Pfizer and Bristol-Myers Squibb, and Imbruvica, from J&J and AbbVie, were top picks for analysts and experts in the months leading up to the reveal, which came just days before a Sept. 1 deadline set by CMS. Both companies expect to lose their patents in the coming years, but fall under the IRA's rules allowing the drugs to be targeted between nine and 13 years after the patent was first filed.

This timeline has been a key point of contention for the drug companies, who argue that at least half the time until the patent expires, which is 20 years after filing, is spent in the research and development process. Still, companies have found ways to extend patent life for years after.

The drugs, which were selected from a list of 7,500, are covered under Part D, and account for high Medicare spend in recent years. 

"These selected drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022 and May 31, 2023," HHS said in a statement Tuesday.

Pundits predicted a number of other drugs that could be included based on spend, including Novo Nordisk's (NVO) Ozempic, which did not make the list, but still could in subsequent years. The diabetes drug, an injectable that some have started to use for weight loss, has caused a spike in healthcare spend for employers in recent months.

The companies will begin a negotiation process in early 2024, and CMS will publish the finalized negotiated rates next September.

FILE - In this Thursday, Feb. 28, 2013 file photo, a Merck logo is placed on scientist's lab coat in West Point, Pa. The Food and Drug Administration on Thursday, Sept. 4, 2014 said it has granted accelerated approval to Merck's Keytruda, for treating melanoma that's spread or can't be surgically removed, in patients previously treated with another drug. (AP Photo/Matt Rourke, File)
A Merck logo on a scientist's lab coat in West Point, Pa. (Matt Rourke/AP Photo, File) (ASSOCIATED PRESS)

More lawsuits expected

More than a half-dozen lawsuits have already been filed in various districts around the country, in what some analysts say is an attempt to fast-track the issue to the US Supreme Court. And more are expected after Tuesday's reveal.

The company lawsuits allege the powers granted to Medicare by the Inflation Reduction Act to negotiate prices of the most expensive single-source drugs are unconstitutional.

They cite the First Amendment, or freedom of speech, alleging they are being forced into the negotiated pricing process; the Fifth Amendment, or unlawful government seizure, alleging that Medicare is taking the drugs at the negotiated price; and the Eighth Amendment, or excessive fines, for the fines Medicare can levy for noncompliance.

The Biden Administration has said there is nothing in the Constitution that prevents Medicare from setting drug prices.

"For far too long, pharmaceutical companies have made record profits while American families were saddled with record prices and unable to afford life-saving prescription drugs. But thanks to the landmark Inflation Reduction Act, we are closer to reaching President Biden’s goal of increasing availability and lowering prescription drug costs for all Americans,” said HHS Secretary Xavier Becerra in a statement Tuesday.

Some analysts believe the lawsuits will not be successful in delaying the negotiation process, which is slated to begin in February.

Leerink Partners said in an updated note Monday that biopharma manufacturer exposure is immaterial because the estimated profits that could be impacted are a small percentage of global earnings.

"But there could be some downward pressure on late-decade consensus expectations for certain products if litigation challenges to CMS’s ability to 'negotiate' fail, and sell-siders adjust US revenue estimates for exposed products," Leerink added.

And nearly a year after the IRA was first passed, a recent poll shows 83% of Americans still support the idea of negotiating drug prices.

Some of these same Americans could be negatively impacted by the move, the industry contends.

Companies like AstraZeneca say it has affected how the company invests in research and development, and the lobbying group PhRMA says the costs the government is trying to save will result in restricted access to drugs for seniors covered by Part D. Both entities are suing HHS and CMS.

John O'Brien, president and CEO of the National Pharmaceutical Council, said in a statement, "Many important questions related to patient input, patient access and negotiated formularies, and therapeutic alternatives remain unanswered even as the process begins in earnest. There are also significant unintended consequences that are not yet well understood, such as how this process may create perverse incentives delaying launches, reducing subsequent indications, and chilling evidence generation."

Follow Anjalee on Twitter @AnjKhem.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance