Medicare Negotiations: Drugmakers' Final Price Statements

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The Medicare drug price negotiations have concluded, but the final prices have not been disclosed yet.

The new negotiated prices for 10 drugs will be disclosed by Medicare at the start of September and will take effect in 2026.

Medicare drug price negotiations are not as concerning to drugmakers as they were in recent months, at least in the short term. Despite maintaining that these negotiations are a long-term threat to their drug innovation and profits, drugmakers appear less concerned about the immediate impact on their businesses.

According to recent quarterly earnings calls of several companies, including and , there has been a shift in executive commentary.

Medicare has been granted the authority to negotiate drug prices directly with manufacturers under President Joe Biden's Inflation Reduction Act, a move aimed at making costly medications more affordable for seniors.

On July 26, Bristol Myers Squibb CEO Christopher Boerner announced that the company had received the final price from the government for its blood thinner Eliquis, which it shares with other companies.

Boerner stated that the company is becoming more confident in its ability to handle the impact of Medicare drug price negotiations on treatment, as it has seen the price. Bristol Myers will provide more information about the expected impact on its investor relations website once Medicare releases the final prices.

Robert Michael, CEO of the drugmaker, stated a day prior that the anticipated sales decline for its top-selling leukemia drug, Imbruvica, has been incorporated into the company's financial projections.

Michael stated on the company's earnings call that despite incorporating modeling into our outlook, we still anticipate meeting our long-term expectations.

After reviewing the negotiated prices for Xarelto and Stelara, J&J Worldwide Chairman Jennifer Taubert stated that the company's long-term growth outlook remains positive.

On July 18, CEO Vasant Narasimhan stated that the short-term impact of Medicare drug price negotiations on the company's first set of drugs might be manageable. Entresto, the company's heart failure drug, is among those chosen for negotiations.

Narasimhan stated that the policy in the long-term is not beneficial for innovation or patients in the US.

He stated that the policy is not a good one, as it is detrimental to American patients and innovation. He sincerely hopes that it gets corrected.

On their earnings calls, executives from each drugmaker similarly expressed their opposition to Medicare drug price negotiations.

"Bristol Myers Squibb's Boerner expressed concern about the long-term implications of IRA on innovation during the company's earnings call, stating that the government's practice of setting arbitrary prices on life-saving medicines is not good public policy."

The district courts are yet to make decisions on lawsuits brought by Merck and Novartis against negotiations. These cases involve overlapping claims with those rejected by Novo Nordisk, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, J&J, and industry trade groups in recent months.

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Health care goes Hollywood (sort of)

Lights, camera, action!

Unless we're discussing the popular medical drama "Grey's Anatomy," health care is not typically associated with the entertainment industry.

Northwell Health, the largest health system in New York, is venturing into the entertainment industry with the launch of its TV and film production studio, Northwell Studios, in late July.

Ramon Soto, chief marketing officer at Northwell Health, stated that the goal is not to turn the studio into a money-making machine, but rather to ensure most projects remain cost neutral.

Soto stated that the studio was established to increase awareness about Northwell, given the competitive and saturated market in the New York metropolitan area, where there are numerous prestigious health systems and academic medical centers. Soto's task is to differentiate Northwell from the competition.

Northwell has been involved in various entertainment projects, including participating in the Netflix docu-drama series "Lenox Hill," an Academy Award-shortlisted Covid-19 documentary, and a documentary about mental health with HBO.

Soto stated that Northwell Studios aims to facilitate the health system's execution of such projects on a more frequent basis.

"Northwell Studios' goal is not just to gain fame and recognition in the entertainment industry, but to establish a consistent infrastructure for regular production. Soto explained in an interview with CNBC that he is not constructing a soundstage or a studio, but rather utilizing the millions of square feet, 21 hospitals, and 88,000 employees, caregivers, and storytellers at Northwell Health to create content."

Soto stated that there are currently five projects in development, although not all of them will necessarily be completed. He emphasized that unscripted content has been Northwell's primary focus so far, and there is a comprehensive consent process in place for patients and employees who choose to participate.

Northwell Studios is considering the possibility of creating scripted content, but patients should not anticipate seeing actors and film crews moving about the corridors.

""As a health system, we cannot disrupt our operations or patient flows. We will determine the least disruptive and most impactful method to capture this content," Soto stated."

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