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Bristol Myers Squibb warns US price reforms will dent drug development

by Ozva Admin

Bristol Myers Squibb says it expects to cancel some drug development programs due to US government drug pricing rules that will be phased in starting next year.

Giovanni Caforio, chief executive of the US drugmaker, told the Financial Times that he was reviewing his portfolio and expected that some drug candidates would not be funded as a result of the administration reforms. Inflation Reduction Law.

He said cancer treatments would bear the brunt of some measures, including giving the federal government for the first time the power to negotiate prices for some of the most expensive drugs bought by Medicare, the federally funded retiree health plan. the taxpayers.

“I hope we cancel some programs, whether it’s, you know, a full indication for an existing drug or a new drug. We are going through a review of our portfolio now,” she said in an interview.

“IRA’s biggest impact is actually in oncology. He’s in cancer therapy.”

The IRA reforms are the biggest reorganization of drug prices regulation in decades and have been widely praised by consumer advocates. However, the pharmaceutical industry has warned that they threaten to stifle innovation and hamper the development of life-saving drugs.

The companies say they are reviewing their pipeline of drug candidates to determine whether it is still financially viable to invest in particular drugs and therapies. Earlier this month, Eli Lilly said he was scrapping developing of a drug targeting blood cancers, due to the impact of pricing reforms.

“The IRA changes many dynamics for small molecules in oncology, and when we integrate those changes with this program and its competitive landscape, future program investment no longer met our threshold,” a Lilly spokeswoman said.

Lilly licensed the drug from Chinese pharmaceutical company Fosun Pharma in 2020 for an initial payment of $40 million.

The IRA introduces a $2,000 cap on annual “out-of-pocket” costs (out-of-pocket costs) for the 64 million Medicare beneficiaries, who are primarily retirees age 65 and older. It also penalizes drug manufacturers that raise prices above the rate of inflation.

Analysts say the most significant reform is giving the government for the first time the power to negotiate prices for some of the most expensive brand-name drugs nine to 13 years after launch. The Congressional Budget Office has estimated that this provision would produce savings of up to $100 billion over a decade.

Caforio said that the reforms allowed the government to “set the price” of these drugs, instead of engaging in a true negotiation. This would make it much harder for companies to justify continuing to invest in the development of existing drugs to expand their indication to target different diseases, a common occurrence for popular cancer drugs, he said.

“The period during which we can earn a return on our investments has been arbitrarily shortened significantly. Like all of our peer companies, we are concerned about that because it will impact how many new drugs are developed and it will impact how new drugs are developed.”

Caforio said that BMS had not yet identified any drug candidates that could be shelved. The company remains well positioned due to its strong pipeline of new drugs, which will not be eligible for government price review for many years, he said.

Patient groups said the pharmaceutical industry’s claims that pricing reform would kill off innovation was “scary,” noting that Americans pay far more for brand-name drugs than people in other countries.

“According to nonpartisan budget experts at the Congressional Budget Office, this bill could diminish the number of new drugs over the next 30 years in just 15 of the expected 1,300 new drugs, that’s less than 2 percent,” said David Mitchell, founder of Patients for Affordable Drugs.

Daina Graybosch, an analyst at SVB Securities, said some companies would likely use the IRA as a convenient excuse to discontinue drugs they would have shelved anyway. But there was no doubt that the reforms would have an impact on innovation, particularly for cancer drugs that required continued investment to expand their indications.

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