14 blockbuster drugs at risk of being hit hardest by US drug pricing law, according to top Wall Street analyst
- Democrats are close to passing the Inflation Reduction Act, a sweeping bill that addresses drug prices.
- The bill would allow Medicare to negotiate the prices of certain drugs.
- SVB Securities identified 14 successful drugs with a high risk of influence.
As Senate Democrats close in on a sweeping $739 billion bill that includes several measures related to drug prices, the pharmaceutical industry is sounding the alarm that it will jeopardize future investment in research and development and hurt the industry.
In particular, the industry opposes a key idea in the bill that would allow Medicare, America’s health care program for seniors and some people with disabilities, to negotiate prices for several top-selling drugs. The limited scope of negotiations will affect some drugmakers such as AbbVie, AstraZeneca and Novo Nordisk more than others, according to an Aug. 2 analysis by SVB Securities analyst David Risinger.
The bill would allow the secretary of health and human services to select 10 drugs to negotiate lower prices in 2023. Those negotiated prices will go into effect in 2026. In 2024, the head of HHS can decide to negotiate prices for another 15 drugs, which would go into effect in 2027. Ultimately, the bill would allow Medicare to negotiate prices for 60 drugs by 2029 .
Price negotiations are estimated to save $101 billion over 10 years and help fund other aspects of the bill, called the Inflation Reduction Act. The bill also sets limits on how much drug companies can raise the prices of their drugs and caps drug costs for individuals in the Medicare program.
SVB’s Risinger called the bill a “landmark moment” and argued it would have a long-term negative impact on the industry. The idea of price negotiation in Medicare has been discussed for nearly three decades in the U.S. government, dating back to 1993. This bill looks like the best chance to make it a reality, as industry consultants told Jefferies’ Michael Yee that the bill has 90 % There is a 95% chance of passing, according to a research report dated August 2.
Risinger identified 14 key drugs that stand to lose the most from this bill. These drugs are expected to reach billions in sales in the coming years, but could be eligible for Medicare-agreed prices years before they are expected to face cheaper generic competition.
In an interview with Insider, Risinger cautioned that this is an initial analysis that is not comprehensive.
For example, GSK’s Shingrix shingles vaccine could be included if the vaccines are eligible for negotiation under the law, he added. The drug industry and analysts are still figuring out what the effects and ramifications of the law may be as the legislation has moved forward quickly. Risinger’s list provides an overview of which blockbusters are likely to be affected.
Here are 14 high-risk medications:
- AbbVie Blood Cancer Pill Imbruvica, which was approved in the US in 2013 and brought in $5.41 billion in sales last year. Risinger suggests it could face an agreed price in 2026, six years before its patents expire.
- Treatment of blood cancer by AstraZeneca Calcification could open at an agreed price in 2026, six years before the expected date of loss of US exclusivity.
- Medicine for type 2 diabetes from Novo Nordisk Ozempic is the Danish drugmaker’s best-selling drug, with sales of around $4.6 billion in 2021. Risinger says she could face the agreed price in 2026, the year she predicts Ozempic will grow to $6.83 billion in U.S. sales.
- Gilead’s HIV pill Biktarvy it won US approval in 2018 and could face an agreed price in 2027, according to Risinger. By 2030, he predicts US sales of more than $10 billion.
- AbbVie pill for arthritis and atopic dermatitis Rinvoq will play a key role in the future of the North Chicago, Illinois-based drug giant, with the company forecasting $7.5 billion in sales by 2025. Risinger, who was first approved in 2019, expects to be eligible for the agreed price in 2028, five years before the key patent expires.
- AbbVie Leukemia Treatment Venclext could be hit in 2026. The drug was first approved in 2016 and saw sales of $1.82 billion in 2021.
- Johnson & Johnson’s antipsychotic Invega franchise may also be affected in 2026. Risinger’s report included $3.31 billion in 2026 with projected U.S. sales of the Invega franchise, which is patent-protected through 2031.
- Eli Lilly Mounjaro is the only drug on the list to be approved in 2022. The type 2 diabetes drug has drawn excitement for its potential as an obesity treatment after it showed “substantial and sustained weight loss” in a late-stage study. Risinger says Mounjaro could be subject to price negotiations in 2031, five years before its patents expire.
- Eli Lilly’s breast cancer drug Version it won approval in 2017 and could be affected by the agreed price in 2026. Risinger says that’s five years before his patents expire.
- AstraZeneca Ultomiris is the only rare disease treatment on the list, indicated for the treatment of paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome. Risinger estimates that an agreed price could be in 2031, four years before key patents expire in 2035.
- Treatment of schizophrenia and bipolar disorder Vraylar is the third AbbVie drug on Risinger’s list. The pill won approval in the US in 2015, and Risinger estimates it would be eligible for the talks in 2026.
- Amgen’s Enbrel stands out as the oldest drug on the list, first gaining approval in the US in 1998. The injection treats several inflammatory conditions such as arthritis and psoriasis. Enbrel had sales of $4.47 billion last year. Risinger estimates it could face an agreed price in 2026, three years before the patents expire.
- Johnson & Johnson’s Darzalex Faspro was approved in 2020 for the treatment of multiple myeloma. Given as an injection under the skin, it is a more convenient version of Darzalex, which required a lengthy IV infusion. Risinger’s analysis says it could face an agreed price in 2033, three years before expected generic competition.
