Sector News

Bristol’s Celgene buyout ‘more important’ given drug pricing pressure, CEO says

July 25, 2019
Life sciences

The drug pricing debate is raging on in Washington, D.C., and that’s part of the reason Bristol-Myers Squibb wants to nab Celgene, CEO Giovanni Caforio told analysts Thursday.

Like other pharma watchers, Caforio is uncertain about the fate of proposals making their way around the halls of Congress and in the White House. But he promises the company’s Celgene buy will help the company fortify its position regardless of what lawmakers decide.

Asked about this week’s bipartisan Senate drug pricing bill on Bristol’s conference call Thursday, Caforio said the situation is “fluid” in Washington. A debate over pricing has been burning for years, but it’s still “early days” in the conversation, Caforio figures.

Still, the CEO believes “we are at the beginning of a period of change from a policy perspective,” adding that he supports measures to help patients afford their drugs.

While it’s unclear what exactly lawmakers will do to fight drug prices—and whether those measures will hit pharma hard—the conversation will surely intensify as next year’s U.S. elections near. As Caforio sees it, Bristol’s $74 billion Celgene buy will give BMS a more diversified portfolio, more growth opportunities and launches, and additional drugs in various reimbursement channels.

That diversity will be important if lawmakers decide to limit the industry’s pricing in one channel or another, he argued. For instance, some proposals would hit Medicare Part B—which covers physician-administered drugs—while others focus in on Medicare Part D, which covers pharmacy-dispensed meds. Caforio said the buyout is “more important” given uncertainties in Washington.

This week, Senate Finance Committee Chair Chuck Grassley and ranking Democrat Ron Wyden revealed their drug pricing reform proposal, following countless other bills in recent years. The latest measure aims to lower patients’ share of drug costs in Medicare Part B and D and forces new rebates on branded drugmakers that raise prices more than the rate of inflation.

It’s one among many proposals making their way around Washington, D.C. House Speaker Nancy Pelosi has said she’ll release a bill in September, and the White House is reportedly working on a new executive order of its own.

Since taking office, President Donald Trump has blasted the pharma industry on pricing, and his administration has worked to fight price hikes, although increases continue. Two of Trump’s moves cratered earlier this month when a court blocked an order forcing drug prices into TV ads and the administration itself withdrew a bid to overhaul drug rebates.

Bristol-Myers Squibb aims to close its Celgene deal in late 2019 or early 2020. As part of the deal, the company must offload psoriasis med Otezla in a process that should generate “significant bidding interest,” BMS execs said Thursday.

By Eric Sagonowsky

Source: Fierce Pharma

comments closed

Related News

October 2, 2022

GSK names Julie Brown, a 25-year AstraZeneca veteran, its first woman CFO

Life sciences

Five years ago, GSK made headlines when it hired Emma Walmsley to become the first woman to run a major pharmaceutical company. Now the Big Pharma has brought in another woman to control the company’s finances. Julie Brown will be GSK’s next chief financial officer. Brown, currently the chief operating and financial officer at fashion and beauty brand Burberry Group, is set to replace Iain Mackay.

October 2, 2022

Moderna creates new launch preparation role, poaches Novartis exec as manufacturing lead

Life sciences

Moderna created a new role responsible for “building out the company’s organization to support its growing pipeline.” Starting first thing 2023, Juan Andres, Moderna’s manufacturing head, will step into this new role under the title president of strategic partnerships and enterprise expansion, the company said Thursday.

October 2, 2022

Torrent Pharma to acquire Curatio for $245.16m

Life sciences

The latest takeover is anticipated to boost the presence of Torrent in the dermatology segment. Indian company Torrent Pharmaceuticals has signed a definitive agreement for the complete acquisition of Curatio Healthcare for $245.16m (Rs20bn).