Read our Pharma Market Update for our sector insights. In our view, the pharma industry needs to ‘double-down’ on organic and inorganic innovation to navigate multiple challenges in the coming years. First is a looming “patent cliff” with the top 20 biopharma companies collectively facing as much as $180B of potential revenue headwind through 2028. Also, we expect physician access may become more challenged due to hospital and health system consolidation in recent years. Finally, the Inflation Reduction Act (IRA) will pressure clinical development strategies and may have ‘ripple’ effects into commercial pricing.

Key Takeaways

1. Inflation Reduction Act (IRA). The U.S. Department of Health and Human Services announced the first round of Medicare price reductions under the IRA. The price reductions averaged 60% (ranging from 38% to 79%). The worst hit drugs were Merck’s Januvia (cut by 79%) and Novo Nordisk’s Fiasp (cut 76%).
2. Entering a “GLP-1” era. Many pharma companies are focused on new iterations of weight loss drugs with fewer side effects and lower costs. At the American Diabetes Association conference in late June, researchers shared data on 27 new GLP-1 drugs in development, some of which target a different hormone. Also, there is early data suggesting new applications for GLP-1 drugs in new disease areas such as Alzheimer’s Disease. Finally, Teva launched the first GLP-1 generic in the United States.
3. Advances in Alzheimer’s. Eli Lilly received FDA approval for a potential blockbuster drug for Alzheimer’s Disease (Kisunla), on the heels of Lequembi (by Biogen and Eisai) in early 2023. Both drugs are the vanguard of a new class of drugs that are hypothesized to be the root cause of the disease. There are upwards of 7M+ Americans with Alzheimer’s Disease today.
4. The BIOSECURE Act. In our view, the BIOSECURE Act may not get a vote until after the Presidential election. Even still, we believe that the proposed legislation has already had a significantly negative effect on the willingness of life sciences companies partnering with Chinese CDMOs, CROs, and drug developers.

We hope you find this information valuable. If you’d like to discuss further, please reach out to our Research team.

Read our 1H 2023 Pharma Market Update here.