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Morning Briefing

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Wednesday, Apr 27 2016

Full Issue

Even Amidst Outcry Against Costs, Pharmaceutical Companies Are Still Hiking Prices

News outlets from across the country report on the pharmaceutical drug industry.

From the campaign trail to the halls of Congress, drug makers have spent much of the last year enduring withering criticism over the rising cost of drugs. It doesn鈥檛 seem to be working. In April alone, Johnson & Johnson raised its prices on several top-selling products, including the leukemia drug Imbruvica, the diabetes treatment Invokana, and Xarelto, an anti-clotting drug, according to a research note published last week by an analyst for Leerink, an investment bank. Other major companies that have raised prices this year include Amgen, Gilead and Celgene, the analyst reported. (Thomas, 4/26)

If you thought drug makers might hunker down in the face of public outrage over pricing, think again. Given the clamor over the cost of prescription drugs, most manufacturers were expected to avoid drawing attention to themselves by boosting price tags. But several companies have been hiking prices for their medicines at a rate that one Wall Street analyst found surprising. 鈥淭he price increases for established brands [sold by drug makers that he follows] have been substantial, indeed,鈥 wrote Leerink analyst Geoffrey Porges in an investor note. He tracked price hikes on various drugs that are sold by several companies since the beginning of 2015. (Silverman, 4/22)

The soaring cost of prescription drugs has generated outrage among politicians and patients. Some cancer drugs carry price tags of more than $100,000 a year, and health plans are increasingly asking people to shoulder a greater share of the cost. In surveys, Americans regularly cite drug prices as a top health care concern, which may be why presidential candidates keep bringing them up. Congress has jumped into the debate, holding a series of hearings on the issue. But there are no simple answers. (Thomas, 4/27)

States across the country have been battling it out with Big Pharma over drug pricing, with some introducing bills that take aim at skyrocketing costs. People on both sides of the issue are wondering whether the states鈥 efforts will pay off, and now, some analysts have an answer: 鈥減robably not.鈥 鈥淚t seems the current wave of state legislations brought up to address the increase in drug costs is a very modest risk to pharma, if at all,鈥 Bernstein analysts said in a report. The proposed legislation coming from the states seems 鈥渢o be more rhetoric than imminent pricing concern,鈥 the analysts said. (Wasserman, 4/22)

Increased transparency and competition in the pharmaceutical industry and expanded value-based payment models would help address rising prescription drug prices, according to a coalition aimed at containing costs. (Muchmore, 4/25)

Calls for containing soaring prescription drug costs are all the rage on the campaign trail, and lawmakers from both parties have been conducting hard-hitting hearings on Capitol Hill to expose the worst pricing practices of major pharmaceutical companies. But with a powerful, well-financed drug industry strongly opposed to major reforms, the prospects for any significant change in the way drug companies do business is relatively slight, at least for the foreseeable future. (Pianin, 4/25)

Germany, Europe鈥檚 largest market for drugs, is emerging as a new front in the battle on drug pricing for pharmaceutical companies already engaged in skirmishes with U.S. health insurers and legislators. (Koch, 4/24)

Eli Lilly & Co. said revenue rose nearly 5% in its latest quarter as sales of new drugs helped offset declines in some established products, while profit dropped 17% due to higher expenses for research and development and a currency devaluation in Venezuela. The earnings fell short of analysts鈥 expectations, sending Lilly鈥檚 shares down 1.9% to $76.45 in late-morning trading Tuesday. (Loftus and Hufford, 4/26)

Relax, Teva and Allergan investors. The companies are on track to close their whopper knockoffs deal in the first half of June or so, one analyst says. According to Bernstein鈥檚 Ronny Gal, Teva has now sold off all the already-marketed products it needed to jettison in order to close its $40.5 billion buy of Allergan鈥檚 generics unit. It鈥檚 started casting off pipeline assets, too, and once it鈥檚 officially selected buyers for all of its candidates, it鈥檒l submit a data package to the FTC and the body will vote on approving the transaction. Timeline: three to four weeks, Gal figures. (Helfand, 4/25)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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