BIG PHARMA EARNINGS WATCH: NOVARTIS, MERCK, GLAXO SMITH KLINE, BRISTOL-MYERS SQUIBB
New Q3 Earnings Reports Underscore How Price Hikes, Anti-Competitive Tactics Boost Branded Drug Company Profits
Another batch of third quarter earnings reports from brand name drug makers Novartis, Merck, GlaxoSmithKline and Bristol-Myers Squibb demonstrate yet again that hiking pricing on prescription drugs is bigtime profitable for Big Pharma. All four drug makers beat Wall Street expectations after having hiked prices on products in their portfolios during the pandemic.
- Novartis beat Wall Street analysts’ earnings expectations for the third quarter.
- The pharma giant posted profit of $2.76 billion for the quarter, up from $1.93 billion the year prior.
- Novartis’ performance was driven by strong results in the pharmaceutical division, which was up eight percent year over year.
- Novartis raised its sales expectations for its two best-selling drugs, psoriasis and arthritis treatment Cosentyx and heart failure drug Enresto.
- Merck bested Wall street earnings expectations in Q3.
- Overall sales increased more than 20.4 percent in the quarter – to $13.15 billion – and pharmaceutical sales were up 18.3 percent, to $11.5 billion.
- Sales of Merck’s blockbuster drug cancer Keytruda brought in a record $4.5 billion in the third quarter.
- According to Axios, Keytruda is “close to becoming the highest-selling drug in the world and would be a Fortune 200 company on its own.”
- GSK beat Wall Street earnings and revenues expectations for the third quarter.
- Quarterly revenues topped $12.5 billion.
- Sales for the company’s oncology division were up more than 30 percent, driven by blockbuster cancer drug Zeluja,
- Bristol-Myers Squibb also beat Wall Streat expectations in Q3, posting revenues of $11.62 billion.
- Strong sales were driven by blockbuster cancer drugs Revlimid and Opdivo, which brought in $3.35 billion and $1.9 billion, respectively.
- Blood-thinner Eliquis, another one of Bristol-Myer Squibb’s best-selling drugs, brought in an additional $2.4 billion for the quarter.
The new earnings reports come against a backdrop of significant price hikes from the companies during the pandemic. All four drug makers have engaged in price hikes during the pandemic and have a history of engaging in anti-competitive tactics:
- 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)
- Already this year Merck has increased prices 20 times, including on blockbuster diabetes medicines Januvia and Janumet – both by five percent.
- The brand name company also raised the price of HIV therapy treatment Insentress by almost five percent earlier this year.
- Merck’s blockbuster cancer drug Keytruda, which brought in $4.5 billion in Q3, is on track “to becoming the highest-selling drug in the world and would be a Fortune 200 company on its own.
- Last year, Merck hiked prices at least 45 times.
- GlaxoSmithKline has already raised prices on more than 30 drugs in 2021, including on its blockbuster respiratory treatments and its cancer drug Zejula.
- GSK participated in summer price hikes last year, even as Americans battled the economic consequences of the pandemic.
- In 2020, GSK jacked-up prices 47 times, including on top-selling respiratory drug Trelegy Ellipta.
- Bristol-Myers Squibb started off the new year by hiking prices on at least ten medications, including two key cancer drugs, Opdivo and Revlimid, as well as on blockbuster blood thinner Eliquis.
- Last year, Bristol-Myers Squibb hiked prices on at least 15 medications.
- In 2019, Bristol-Myers Squibb acquired Revlimid in a $74 billion blockbuster deal with Celgene. On the day the deal was announced, Celgene boosted the price of Revlimid to $719.82. The drug cost $247.28 in 2007.
- This was business as usual for Bristol-Myers Squibb. From 2015 to 2019 the company had the most price hikes per drug of any Big Pharma company.
Read more on Q3 earnings from Johnson & Johnson and Roche HERE.
Stay tuned as we continue to monitor Q3 earnings announcements from Big Pharma.