The clamor over prescription drug pricing is weighing more heavily on biotech managements.

A recent review of risk factors cited by the 100 largest companies listed in the Nasdaq Biotechnology Index found 89 percent cited worries over pricing pressures, according to the BDO advisory and consulting firm, which examined filings with the US Securities and Exchange Commission.

And concern has been steadily rising. In 2015, the firm noted that 79 percent of biotechs cited anxiety over pricing as a risk factor to their businesses, while 68 percent did so in 2014 and 66 percent in 2013. Thanks to increased controversy over the cost of medicines, pricing is now the 16th most worrisome issue.

advertisement

The list of corporate concerns that rank higher includes competition; regulation; litigation; patent disputes; and payer reimbursement, among other matters. (We should note BDO did not previously break out pricing as a separate risk factor, so this chart does not display a direct comparison to earlier years. However, we asked the firm for the data).

“They’re moving away from a world where they could price what they wanted, so maybe they didn’t understand the risk until now,” said David Friend, who heads BDO’s Center for Healthcare Excellence and Innovation. “But it’s a huge, systemwide problem and they’re just beginning to grapple with it.”

Indeed, pharmaceutical pricing has generated national outrage.

Some companies bought old drugs and quickly jacked up the prices. At the same time, the launch prices for new medicines for such hard-to-treat diseases as hepatitis C and some forms of cancer, as well as rare diseases, continue to climb new heights. Even some lower-cost generics cost more than in the past.

The issue has become a talking point in the presidential campaign. Some state legislators are pushing laws to force drug makers to disclose their costs. And payers have either sought to restrict coverage, or, in some cases, demand companies set pricing according to patient outcomes.

One company on the Nasdaq biotech index, in fact, has generated a great deal of the heat. Gilead Sciences (GILD) sells the Sovaldi and Harvoni hepatitis C treatments, which carry list prices of $84,000 and $94,500, respectively, before any rebates are offered to payers.

The medicines have cure rates exceeding 90 percent and Gilead regularly argues that the expense will eventually become a solid return on investment for the nation’s health care bill because costly liver transplants and liver cancers will be reduced. Still, the near-term costs often overshadow this point.

Among other issues that concern biotech execs, threats to international operations and sales ranked 13, but might well be higher now because BDO compiled its ranking before the recent Brexit vote took place in the United Kingdom. Drug makers face several challenges doing business in the UK if the decision is finalized.

Among the other companies on the Nasdaq list are Amgen; Celgene; Vertex (VRTX) Pharmaceuticals; Horizon Pharmaceuticals; Biogen; Jazz Pharmaceuticals; BioMarin Pharmaceutical; Shire; and Alexion Pharmaceuticals (ALXN).

We asked the Biotechnology Innovation Organization, the trade group for the biotech crowd, for a comment and will update you accordingly.

Leave a Comment

Please enter your name.
Please enter a comment.

Your daily dose of news in health and medicine

Privacy Policy