CMS demands on drug pricing ‘extreme,’ ‘highly problematic,’ says Leerink

After the Department of Health and Human Services and Centers for Medicare & Medicaid Services issued a press release titled “HHS, CMS Set Most-Favored-Nation Pricing Targets to End Global Freeloading on American Patients,” spelling out further details about President Trump’s plans aimed at lowering prescription costs, Leerink called the Administration’s demand “extreme” and adds that the firm does not think that the industry can deliver what is stated. The release calls for companies to establish Most-Favored-Nation pricing in the U.S. for all branded pharmaceuticals, but implementation remains unclear and the firm contends that biopharma industry executives “need to further educate the Trump administration about highly problematic aspects of this pricing expectation.” Such extreme pricing would “significantly harm a crown jewel US industry, collapse US investment spending, and undercut US innovation at a time when China is supporting booming biopharma innovation,” adds the analyst. Publicly traded large-cap drugmakers include AstraZeneca (AZN), Bristol Myers (BMY), Eli Lilly (LLY), GSK (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).