As pharmaceutical companies have reported their earnings over the past two weeks, it’s been like staring at a foreboding sky, guessing: Will it merely drizzle? Or will there be a storm, and a flood?
The reason? Worries about drug prices. What else. As Pfizer’s new chief executive, Albert Bourla, said during a question-and-answer session with analysts: It’s “very clear that pricing is not going to be a growth driver for us now and, I think, in the future. It’s very clear.”
Pfizer said on Jan. 29 it expects 2019 adjusted earnings per share to be between $2.82 and $2.92, about 4 percent less on the high-end from the Wall Street analyst estimate. Various reasons were offered, including the arrival of generic versions of its blockbuster Lyrica and foreign exchange rates. But the loss of the ability to boost earnings through annual price increases, which has benefitted drug companies for years, was an undeniable factor. Pfizer shares are down 2.8 percent this year.
Matthew not matter how the sentence is framed, storm clouds are here to stay. No Easing!
Only avenue for the pharma companies that do not have/produce orphan drugs is to raise prices of the existing drugs.
Why? Answer is simple. They do not have many new drugs that are for masses and affordable and can offset the revenue gain that companies get from price increases of existing drugs.
Marginally better drugs that are high priced are white elephants that no one wants to use.
Basically what all that means. Pharma’s existing business model that is OOOOLD is broken and beyond repair. Need new model that will also serve ~80% of the global population.
Is this sentence correct: “This means that there is a 9 percentage point difference between what a consumer would pay at the drug counter and what pharmaceutical companies received.”. There was, on average, an additional 9% differential due to the price changes, but it doesn’t mean there’s only a 9% difference. This sort of thing could happen in multiple quarters, and there was likely an initial price differential.
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