I Heard It Through The (Product) Pipeline



Perhaps more than in any other industry, pharma companies are dependent on their pipelines -- or products in development. Indeed, for public pharma companies, the pipeline often appears more important than current performance in the eyes of CEOs and analysts.

One reason for that: A company’s current drugs, sooner or later, will lose their exclusivity or even become OTC. So corporate growth depends on new products.

That brings us to the federal Inflation Reduction Act (IRA), parts of which big pharma vehemently oppose because they threaten product pipelines. The IRA became law in 2022, but the most controversial part, the first Medicare drug price negotiations, are now underway with pharma companies including Johnson & Johnson, Merck and AstraZeneca.



The IRA calls for implementation of the finalized reduced drug prices under Medicare, after selected drugs have been on the market for either seven years (if capsules, tablets or pills) or 11 years (if injected or infused).

Pharma companies say this discourages further R&D following drug approval by the FDA.

Such R&D helps companies find new uses for their drugs, increasing their value to the public, explained trade association PhRMA (the Pharmaceutical Research and Manufacturers of America). The IRA, thus, does “more harm than good for underserved communities.”

And, of course, there’s the financial side.

The IRA will “have a major impact on the lifetime revenue of those drugs likely to be negotiated,” said a Boston Consulting Group (BCG) article. “Certain therapeutic areas, such as oncology and metabolic disorders, have proportionately more older patients and are thus going to be more affected than others,” BCG continued, noting that “pharma leaders and investors will need to reevaluate their disease area priorities….”

Such government initiatives as the IRA are “negatively impacting investor appetite for the [pharma] sector,” acknowledged information services provider Clarivate last week as it released its annual “Drugs to Watch” report.

The report identifies 13 drugs set to launch in 2024 which Clarivate predicts will either achieve blockbuster status by 2029 or deliver “game-changing benefits to patients.”

Those underserved communities that the pharm industry is so concerned about?

One of the13 drugs is a therapy from CRISPR Therapeutics and Vertex Pharmaceuticals that fights sickle cell disease, which predominantly affects Blacks.

Clarivate said this therapy represents the first approval of a CRISPR/Cas9 gene-edited therapy globally, one of three technologies – along with AI and machine learning – which “in the long run… hold enormous potential to help drugmakers cut costs and shorten innovation cycles.”

Shortened innovation cycles, of course, would lower those crucially important development timeframes before Medicare price reductions can be applied.

For pipeline followers, by the way, other “Drugs to Watch” cited by Clarivate include prostate cancer and myeloma treatments from Johnson & Johnson; a breast/lung cancer drug from AstraZeneca/Daiichi Sankyo; RSV vaccines from Pfizer/GSK; a Bayer/Regeneron drug for eye diseases; and an Eli Lilly treatment for ulcerative colitis and Crohn’s disease.

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