Pharma Warns Investors About Future Earnings Impact of Drug Pricing Reform

November 10, 2022

Several pharma companies have told investors of potential earnings drops caused by the looming implementation of drug pricing reform in the US. This includes companies like Merck, Amgen, Eli Lilly, and more, some of which blamed decisions to cut back on research. The drug reform law in the Democrats’ Inflation Reduction Act would let the government negotiate the prices of a small number of drugs and fine companies for hiking Medicare drug prices faster than inflation.

According to Christopher Newman, “Companies said both arms of the law could weigh on their business. Merck warned that sales and profits will be negatively affected by the inflation-linked Medicare rebates and by government drug price negotiation. The company also noted changes to Part D drug benefits that will increase liability for some manufacturers.”

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(Source: BioPharmaDive, November 9th, 2022)

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