Drug companies negotiate new prices with Medicare

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Good evening! The first round of Medicare drug price negotiations has ended — but we still don’t know the final prices the U.S. government and drug companies have agreed upon.

The health care program is scheduled to unveil new agreed prices for ten medicines in early September. These prices are scheduled to take effect in 2026.

But drugmakers seem less concerned about the impact of these new negotiated prices on their businesses than they have been in recent months, at least in the short term. Everyone is emphasizing that the Medicare drug price negotiations pose a long-term threat to the pharmaceutical industry’s innovation and profits, but the immediate dust has settled somewhat.

This is based on comments from executives during recent quarterly earnings calls. bristol myers squibb And Johnson & JohnsonAmong other companies.

President Joe Biden’s Inflation Reduction Act gave Medicare the power to negotiate drug prices directly with manufacturers for the first time in the federal program’s nearly 60-year history, a process aimed at making expensive medications more affordable for America’s seniors.

On July 26, Bristol-Myers Squibb CEO Christopher Boerner confirmed that the company had received the final price from the government for the blood thinner Eliquis, which it shares with Pfizer.

Now that the company has seen that price, it is “increasingly confident in our ability to manage the impact” of Medicare’s drug price negotiations on the treatment, he said. Bristol-Myers will provide more details on the expected impact on its investor relations website once Medicare publicly discloses final prices, according to Borner.

while, AbbVie Inc. Chief Executive Robert Michael said a day earlier that the drugmaker had included in its financial outlook an expected decline in sales of its best-selling blood cancer drug, Imbruvica.

“We came out and said that even with this impact modeled, we still expect to achieve our long-term expectations,” Michael said on the company’s earnings call.

On July 17, Johnson & Johnson Global Chairman Jennifer Taubert said the company's long-term growth outlook “continues to look very good to us today” after seeing negotiated prices for blood-thinning drug Xarelto and psoriasis treatment Stelara.

Novartis The short-term impact of the healthcare drug price negotiations “may be manageable on our first line of drugs,” CEO Vasant Narasimhan said July 18. The company’s heart failure drug Entresto was among the drugs selected for the negotiations.

But Narasimhan said the policy in the long run is “not really good for innovation (or) good for patients” in the United States.

“I think it’s very important to say that this policy is not good. It’s bad for American patients, it’s bad for innovation, and I sincerely hope it’s corrected,” he said.

Likewise, executives at all the drug companies emphasized their opposition to Medicare drug price negotiations in their earnings calls.

“We continue to believe that government arbitrarily setting prices for life-saving drugs is not good public policy,” Bristol-Myers Squibb’s Borner said on the company’s earnings call. “Apart from the short-term dynamics, we remain deeply concerned about the long-term consequences of the Individual Retirement Act on innovation.”

Lawsuits filed by Merck and Novartis against the negotiations are awaiting decisions in district courts. Each case includes claims that overlap with lawsuits filed by Novo Nordisk, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Johnson & Johnson and industry trade groups that have been dismissed in recent months.

Feel free to send any tips, suggestions, story ideas or data to Annika at annikakim.constantino@nbcuni.com.

Healthcare is going Hollywood (sort of)

Lights, camera, go!

If you’re like me, healthcare probably isn’t the first thing you associate with the entertainment industry. Unless, of course, we’re talking about the hit medical drama “Grey’s Anatomy.”

But Northwell Health, New York State’s largest health system, is breaking new ground in entertainment. In late July, the company launched a television and film production studio called Northwell Studios.

The goal isn’t to turn the studio into a money-making machine, said Ramon Soto, Northwell Health’s chief marketing officer. In fact, the health care system plans to ensure that most projects remain cost-free.

Instead, Soto said the studio was created to help raise awareness about Northwell, especially since it operates in a competitive and saturated market. The New York metropolitan area is filled with prestigious health systems and academic medical centers, and it’s Soto’s job to cut through the noise.

Northwell has been involved in entertainment projects in the past. It has been involved in the Netflix docudrama series “Lenox Hill,” an Oscar-nominated COVID-19 documentary and a mental health documentary with HBO.

Northwell Studios aims to help the health system do these types of projects more regularly, Soto said.

“The goal behind Northwell Studios is not, ‘Hey, we’re going to show up, it’s a work of art and put our name in lights.’ It’s really to create more infrastructure to do that on a regular basis,” Soto told CNBC. “I’m not building a sound studio, I’m not building a studio, but I have millions of square feet, 21 hospitals, 88,000 employees, caregivers, storytellers.”

Soto said there are five projects already in development, though not all of them will necessarily be completed. Unscripted content has been Northwell’s “bread and butter” so far, he said, and there is an extensive consent process for patients and staff who choose to participate.

Northwell Studios is also exploring opportunities to produce scripted content, but patients shouldn't expect to see actors and camera crews roaming the hallways.

“We are a healthcare system, and we cannot disrupt our operations or patient flows,” Soto said. “We will work to find the least disruptive and most effective way to capture this content.”

Feel free to send any tips, suggestions, story ideas or data to Ashley at ashley.capoot@nbcuni.com.