BIG PHARMA EARNINGS WATCH: JOHNSON & JOHNSON, NOVARTIS, ROCHE
New Round of Earnings Reports Show Big Pharma Companies Riding High on Massive Profits After Three Rounds of Price Hikes During Pandemic
Brand name drug makers Johnson & Johnson, Novartis, and Roche kicked off another round of earnings reports from Big Pharma for the second quarter of the year this week. All three companies bested Wall Street expectations, posting massive sales and profits, driven by unjustified price-hikes and a history of anti-competitive tactics.
Johnson & Johnson
- Johnson & Johnson smashed Wall Street expectations in the second quarter, raking in slightly north of $23 billion.
- Strong sales were driven by the company’s pharmaceutical division, which saw sales tick up 17. 2 percent in Q2.
- Coming off the strong earnings, Johnson & Johnson raised its guidance for the year, bumping up its expected sales from $90 billion to $93 billion.
- Novartis also bested Wall Street expectations, posting sales of $12.96 billion in Q2.
- Net profit jumped 49 percent to $2.9 billion.
- Strong sales were driven by blockbuster gene therapy drug Zolgensma, psoriasis and arthritis treatment Cosentyx and heart failure drug Entresto.
- Roche reported profits that topped Walled Street expectations, notching $8.96 billion in the first six months of the year.
- Roche’s earnings were so strong, in fact, that the company announced plans to increase its dividend to shareholders.
- A key growth driver for the company was multiple sclerosis drug Ocrevus which saw a 23 percent increase in sales.
The expectation-besting earnings come as the companies have continued to hike prices on prescription drugs and engage in anti-competitive behavior during the pandemic.
Johnson & Johnson
- The brand name giant rang in the year by hiking prices on nearly 30 prescription drugs.
- Last year, Johnson & Johnson hiked prices more than two dozen times at an average rate more than two times the rate of inflation.
- Johnson & Johnson raised the price of its blockbuster drug Stelara by nearly five percent in 2020.
- The company increased the price of schizophrenia medication Invega Sustenna by 10.7 percent in 2019 with no evidence that the drugs had been improved.
- The company’s blockbuster cancer drug Imbruvica costs an eye-popping $180,000 per year.
- Spending on Imbruvica is expected to exceed $41 billion from 2027-2036 thanks to an anti-competitive patent scheme which has already extended the monopoly on the cancer drug by more than nine years.
- In 2018, Johnson & Johnson sought to triple the price of Imbruvica, only to ultimately back down amid fierce public blowback.
- The brand name giant rang in the 2021 New Year by hiking prices on nearly 20 prescription drugs.
- Novartis increased the price of chemotherapy treatment Jakafi last summer, during the height of the coronavirus pandemic.
- Novartis increased prices over 30 times in 2020, including seven percent hikes each on blockbuster drugs Cosentyx and Entresto.
- Novartis increased prices at least 57 times in 2019 by an average of 6.3 percent.
- Novartis hiked the prices of Cosentyx and Entresto in 2019 by a staggering 10 percent each.
- At the same time, Zolgensma, a drug used to treat spinal muscular atrophy remains the world’s most expensive drug, at $2.13 million per patient.
And a recent report from the U.S. House Committee On Oversight and Reform reveals the lengths the brand name giant went to maximize profits on its blockbuster drug Gleevec.
- “Since Launching A 400 Mg Tablet Of Gleevec In 2003, Novartis Has Raised The Price Of The Drug 22 Times.” “A yearly course of Gleevec is priced at more than $123,000 today compared to just under $25,000 in 2003, an increase of more than 395%. Novartis raised the price of Gleevec steadily—and at a steeper rate—as it approached its loss of primary patent exclusivity in early 2016. Between 2010 and 2015, Novartis raised the price of Gleevec 12 times. In 2013 alone, the price increased by 20%.” (Staff Report, “Drug Pricing Investigation: Novartis — Gleevec,” U.S. House Committee On Oversight And Reform, 10/1/20)
- “Due To Gleevec Price Increases, From 2009 To 2019, Novartis Collected Nearly $14.8 Billion In U.S. Net Revenue For The Drug, With U.S. Net Revenue For Gleevec Increasing From $1 Billion In 2009 To More Than $2.5 Billion In 2015.” (Staff Report, “Drug Pricing Investigation: Novartis — Gleevec,” U.S. House Committee On Oversight And Reform, 10/1/20)
- “Novartis Used Several Anticompetitive Tactics To Delay Generic Competition And Maintain Its Profits.” “First, Novartis undertook regulatory steps to extend its primary base compound patent on Gleevec for 26 months, from May 2013 to July 2015. Novartis also engaged in a practice known as ‘pay for delay,’ where the company struck a deal with the first generic entrant to delay entry of the generic by six months. Although the generic company had initially announced that it would price its generic 30% below the price of Gleevec, the generic company ultimately entered the market at a price just 6.4% lower than Gleevec’s price. Novartis executives hailed this high generic price in an email: “That’s good news.” Experts estimate that these strategies—a six-month delay for generic entry and then a six-month duopoly—resulted in $700 million in excess costs to payers in the one-year period from 2015 to 2016.” (Staff Report, “Drug Pricing Investigation: Novartis — Gleevec,” U.S. House Committee On Oversight And Reform, 10/1/20)
- As sales have climbed, Roche has repeatedly hiked prices on the products in its portfolio.
- In the first week of the 2020, Roche hiked prices on 11 drugs.
- Blockbuster cancer drug Perjeta was named one of the top 25 drugs pushing costs up in Oregon.
- A report released in late 2019 found that Roche’s price hikes on the popular drug Rituxan were not supported by innovation or improvements and cost U.S. taxpayers $806 million.
Stay tuned in the coming weeks as we continue to monitor Q2 earnings announcements from Big Pharma.
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