Allergan (AGN), Biogen (BIIB) and Bristol-Myers Squibb (BMY) kicked off 2019 with price hikes — but an analyst on Wednesday called for biopharmas to remain disciplined in terms of drug pricing.
XRBC Capital Markets analyst Brian Abrahams said biopharmas appear to be "self-policing" in terms of hikes for drug prices. Others could avoid attention by waiting until late in the month or year to raise prices, he added.
"We do see an overarching trend of greater restraint, consistent with our expectations for increased 'self-policing' by biopharma companies in the current environment — something we believe will continue to limit the revenue growth companies are able to generate through pricing related to volume," Abrahams said in a report to clients.
On the stock market today, shares of biotechs rose about 1%. Drug stocks slipped a fraction.
Biotechs Conservative In Drug Pricing
Biogen outdid expectations for multiple sclerosis treatments Tecfidera and Tysabri. The firm raised drug pricing by 6% and 3.5%, respectively. Abrahams originally forecast increases of 3% across Biogen's portfolio. Meanwhile, the biotech raised its legacy interferon drug prices by 2%.
The Tecfidera and Tysabri increases were "in the same ballpark as last year," he said.
Other biotechs Amgen (AMGN), Celgene (CELG) and Gilead Sciences (GILD) staved off price hikes for their biggest moneymakers, Evercore analyst Umer Raffat said in his note to clients.
Typically, Celgene waits until later in the year to raise the prices on Revlimid, Pomalyst and Otezla, RBC's Abrahams said. Revlimid and Pomalyst are cancer treatments, whereas Otezla treats forms of psoriasis and arthritis.
"We continue to expect substantial moderation of the annual Revlimid price increases from 11%-14% per year to 3%-5% per year going forward, in light of the current environment as well as their pledge to mostly limit pricing increases to the rate of medical inflation," he said.
For Gilead, drug price hikes have "been important contributors to growth." In early 2018, Gilead raised the prices on most of its key HIV treatments by 7%, Abrahams said. But that doesn't appear to be the case thus far in 2019.
Biopharmas Bristol, Allergan Hike Drug Prices
Bristol is hiking drug prices on five medications that combined are forecast to bring in 54% of its 2019 sales in the U.S. Cancer treatments Opdivo and Yervoy each will cost 1.5% more going forward. The prices of anticoagulant Eliquis, arthritis drug Orencia and cancer drug Sprycel each jumped 6%.
Out of 10 drugs expected to represent 40% of Allergan's U.S. sales in 2019, the pharma giant is raising the prices of seven by 9.5% apiece. But Allergan isn't touching the price of its biggest moneymaker, Botox. Analysts expect Botox to bring in 17% of its U.S. sales this year.
Eli Lilly (LLY) will raise prices on diabetes treatments Jardiance and Tradjenta by 6% each. They are expected to account for 2% and 1% of Lilly's 2019 U.S. sales, respectively.
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The post Biopharmas Restrained In Drug Pricing For 2019 — With These Exceptions appeared first on Investor's Business Daily.
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