Healthy Returns: What drugmakers are saying about final negotiated prices with Medicare

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Good afternoon! The first round of Medicare drug price negotiations is over — but we still don’t know what the final prices will be that the U.S. government and pharmaceutical companies agreed on.

Medicare will announce new negotiated prices for 10 drugs in early September. These prices will then go into effect in 2026.

Still, pharmaceutical companies appear less concerned about the impact of these new negotiated prices on their businesses than they have been in recent months, at least in the short term. They all argue that Medicare drug price negotiations pose a long-term threat to the pharmaceutical industry’s drug innovation and profits, but the dust has settled somewhat.

That's based on comments from executives during the company's recent quarterly earnings call. Bristol Myers-Squibb And Johnson & Johnsonalongside other companies.

President Joe Biden’s Inflation Reduction Act gave Medicare the power to negotiate drug prices directly with manufacturers for the first time in the federal program’s nearly 60-year history. The process is aimed at making expensive medications more affordable for older Americans.

On July 26, Bristol Myers Squibb CEO Christopher Boerner confirmed that the company has received the government's final price for its blood thinner Eliquis, which it will share with Pfizer.

He said that now that the company has seen that price, it is “increasingly confident in our ability to navigate the impact” of Medicare drug price negotiations on treatment. Bristol Myers will provide more details about the expected impact on its investor relations website once Medicare makes the final prices public, Boerner said.

In the meantime, AbbVie CEO Robert Michael said a day earlier that the drugmaker has included an expected decline in sales of its best-selling leukemia drug Imbruvica in its financial forecasts.

“We said that even with modeling that impact, we still expect to be able to deliver on our long-term outlook,” Michael said during the company's earnings presentation.

On July 17, Jennifer Taubert, president of J&J Worldwide, said the company's long-term growth prospects “still look very good” after reviewing negotiated prices for blood thinner Xarelto and psoriasis treatment Stelara.

Novartis CEO Vasant Narasimhan said July 18 that the near-term impact of the Medicare drug price negotiations “may be manageable for our first wave of drugs.” The company's heart failure drug Entresto is among the drugs selected for negotiations.

But Narasimhan said the policy is “really not good for innovation in the long run” [or] “good for patients” in the US

“I think it's really important to say that the policy is not good. It's bad for American patients, it's bad for innovation and [I] “I sincerely hope it gets corrected,” he said.

Executives from each of the pharmaceutical companies also stressed during their earnings calls that they opposed Medicare drug price negotiations.

“We continue to believe that arbitrary government pricing of life-saving medicines is not good public policy,” Bristol Myers Squibb's Boerner said during the company's earnings call. “Regardless of the short-term dynamics, we remain deeply concerned about the long-term impact of IRA on innovation.”

Lawsuits filed by Merck and Novartis challenging the negotiations are awaiting decisions in district courts. Each case raises claims that overlap with lawsuits from Novo Nordisk, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, J&J and industry groups that have been dismissed in recent months.

Please feel free to send tips, suggestions, story ideas and details to Annika at [email protected].

Healthcare is going to be Hollywood (sort of)

Lights, camera, action!

If you're like me, healthcare probably isn't the first thing you think of when you think of the entertainment industry. Unless, of course, we're talking about the hit medical drama series “Grey's Anatomy.”

But Northwell Health, the largest health system in New York state, is breaking new ground in the entertainment world. In late July, it launched a TV and film production studio called Northwell Studios.

The goal isn’t to turn the studio into a money-making machine, said Ramon Soto, chief marketing officer at Northwell Health. The health system plans to keep most projects cost-neutral.

Instead, Soto said the studio was created to help raise awareness for Northwell, especially as it operates in a competitive and saturated market. The New York metropolitan area is filled with prestigious health care systems and academic medical centers, and Soto’s job is to cut through the noise.

Northwell has experimented with entertainment projects in the past, appearing in the Netflix docudrama series “Lenox Hill,” as well as an Academy Award-nominated Covid-19 documentary and a mental health documentary with HBO.

Soto said Northwell Studios should help the health system do more of these types of projects.

“The intent behind Northwell Studios is not, 'Hey, we're going to show up, it's showbiz and get our name out there.' It's really to create a little bit more of the infrastructure to do this on a regular basis,” Soto told CNBC in an interview. “I'm not building a sound stage, I'm not building a studio, but I have millions of square feet and 21 hospitals and 88,000 employees, caregivers, storytellers.”

Soto said there are already five projects in development, though not all will necessarily be completed. He said unscripted content has been Northwell’s “bread and butter” so far, and there is an extensive consent process for patients and employees who sign up.

Northwell Studios is also exploring the possibility of producing scripted content, but patients should not expect actors and camera crews running through the hallways.

“We’re a health system, we can’t disrupt our operations or patient flow,” Soto said. “We’re going to find the least disruptive, most impactful way to capture this content.”

Please feel free to send tips, suggestions, story ideas and details to Ashley at [email protected].