BIG PHARMA EARNINGS WATCH: ASTRAZENECA & GLAXOSMITHKLINE
Brand Name Drug Companies See Surging Profits After Hiking Prices
Today, brand name drug giants AstraZeneca and GlaxoSmithKline (GSK) announced rising profits for the first quarter of 2020 – topping analysts’ expectations.
- AstraZeneca reported a net profit of $780 million, up from $593 million in the same period a year earlier.
- Sales for the drug company increased 17 percent to $6.31 billion driven by asthma medication Symbicort and cancer drug Tagrisso.
- GSK’s revenues jumped 19 percent year over year to $11.26 billion – beating analysts’ expectations.
- For this quarter, GSK reported pharmaceutical sales up six percent.
- Earnings for the British company ‘surged’ 26 percent year over year.
Earlier this year, both brand name giants hiked prices on American patients, despite millions of Americans being unable to afford their prescriptions.
- Already this year, AstraZeneca has increased prices 26 times by an average of 3.5 percent.
- The drug company has raised the price of blockbuster drug Symbicort four times.
- In 2019, AstraZeneca hiked the price of its popular heartburn medication, Prilosec, by five percent.
AstraZeneca has a long history of hiking prices on Americans struggling to afford their medications:
- As AstraZeneca Faced Generic Competition To Its High Cholesterol Drug Crestor, Its “Price Was Increased Several Times Before The Generic Came Out … Including By About 15 Percent Right Before.” “AstraZeneca’s AZN, -0.08% drug Crestor, another of the drugs featured in the report, is a popular but expensive drug that treats high cholesterol. In 2016, when the drug first got a new generic rival, the branded product cost about $300 a month without insurance coverage. The price was increased several times before the generic came out … including by about 15% right before. (AstraZeneca said it could not comment because it was not involved in the study.)” (Emma Court, “Big Pharma Games The System To Make Generic Drugs More Expensive,” MarketWatch, 8/3/18)
- AstraZeneca’s Pricing Strategy Served To Create “A New, Higher Baseline Price When The Generic Hits The Market.” (Tori Marsh, “Prices For Brand Drugs Spike Before A Generic Is Released. Here’s Why.,” GoodRx, 7/27/18)
- After Increasing Drug Prices By As Much As Nine Percent, On A 2018 Earnings Call, Soriot Insisted The Company Was “Sensitive” To Drug Pricing Concerns And Said It Had Raised “Wholesale Prices Earlier [That] Year By ‘Very, Very Modest’ Amounts.” “During an earnings conference call, the AstraZeneca chief executive disclosed the company would not raise prices in the U.S. for the rest of year. Other drug makers have taken the same step in response to pressure from the Trump administration, but he insisted this was ‘our plan … all along’ … He maintained AstraZeneca was sensitive to the problem by raising wholesale prices earlier this year by ‘very, very modest’ amounts, ‘between 1 and 3 percent’ which, he said, was ‘in line with inflation.’” (Ed Silverman, “When Modest Is Actually Excessive: AstraZeneca Spins Its Price Hikes,” STAT News, 7/26/18)
- This year, the company has already hiked prices 42 times, including on its newly acquired cancer drug Zejula.
- And In 2019, GSK jacked-up prices 61 times, including on top-selling respiratory drug Trelegy Ellipta. These price hikes come after The Wall Street Journal reported last January that the company would raise prices on dozens of the drugs in its portfolio.
- This past summer, GSK announced it was raising the price of their ovarian cancer drug Zejula. The price of a 30-day, 100mg supply of Zejula rose five percent from $6,567 to $6,913. When the drug was first approved by the FDA in 2017, it cost $4,917.
So far this quarter, AstraZeneca and GSK join other brand name drug makers Merck, Novartis, Pfizer, Sanofi, Eli Lilly, Roche and Johnson & Johnson in beating Wall Street expectations after hiking prices on American patients. Learn more HERE, HERE, HERE, HERE and HERE.
Check back this week as we continue to monitor Q1 earnings announcements from brand name drug companies.