Eli Lilly is squarely focused on the Japanese market–its largest outside the U.S.–with John Lechleiter, chairman, president and CEO, saying growing cost cutting efforts are a concern and suggesting the policy may not aid efforts at innovation.
On the April 26 earnings call, Lechleiter told SunTrust Robinson Humphrey analyst John Boris that the price cuts this year were felt deeply.
“With respect to Japan, first of all, I’d say Lilly is well-positioned. We’ve been one of the fastest-growing–if not the fastest-growing–company in Japan now for a number of year; and these recent new product launches are keeping us on a strong trajectory there,” Lechleiter said.
But in a reference to a double-whammy on reimbursement price cuts this year in Japan, Lechleiter was not as upbeat.
A once-every-two-years price cut exercise occurred earlier this year to reach savings of $1.5 billion. As well, Japan’s Central Social Insurance Medical Council–known as Chuikyo–implemented a formula for best-selling drugs that saw reimbursement ease as much as 50% for key products.
Japanese lawmakers have also suggested annual price revisions, sending shockwaves through the foreign and domestic companies in the country.
“We are very concerned about the threat of annual repricing,” Lechleiter said.
“The industry’s been quite active in engaging with the policymakers in Japan. I myself have been engaged in that quite recently. Japan is seeing a more rapid uptake of generics; they’re ahead of the time scale for generic adoption that was initially laid out by the government. We believe that, in combination with the current biennial price decreases, puts Japan on a trajectory to keep their drug costs essentially flat for the remainder of this decade and beyond.”
Lechleiter also said that lower price won’t translate into the sweeping economic reforms sought by Prime Minister Shinzo Abe in a battle to break decades of deflation by pushing innovation policies.
“A key part of Abe’s platform has been to actually develop and grow the indigenous biopharmaceutical industry there. Part of our messaging has also included the fact that without an opportunity to realize full value from the products that we do launch there, I think the emphasis on the discovery and development of innovative new medicines in Japan is going to suffer as well.”
Lilly notched 4 new products in Japan last year, including Cyramza (ramucirumab) for gastric cancer and 3 in the diabetes area–Jardiance (empagliflozin), Trulicity (dulaglutide), and an insulin glargine biosimilar.
Overall pharma revenue in Japan gained 16% in the first quarter, up 14% in constant currency, said Phil Johnson, of Investor Relations.
But Johnson added that pharma revenue in China fell 14%, 9% on a constant-currency basis, as buying patterns changed.
By EJ Lane
Source: Fierce Pharma
Avivi joins Bayer fresh off a yearlong stint as chief marketing officer of Advance Auto Parts, which followed about three years spent as marketing chief of another auto parts company, Tenneco. Rounding out her nearly 30-year career in marketing are leadership roles at consumer goods giants Kimberly-Clark and Procter & Gamble.
Air Liquide S.A. (Paris) is continuing its development with the acquisition of Homecare activities in Belgium and the Netherlands. The two entities acquired in Belgium and the Netherlands support 10,000 patients living with respiratory insufficiency, sleep apnea syndrome or requiring infusion or nutrition treatments.
US-based Vertex Pharmaceuticals has agreed to pay approximately $4.9 billion in cash to acquire Alpine Immune Sciences, a compatriot biotechnology company focused on discovering and developing innovative, protein-based immunotherapies.
