Written by Deena Beasley
SAN FRANCISCO (Reuters) – The biopharmaceutical industry aims to reverse last year's slump in investor returns in 2025, but what President-elect Donald Trump's priorities will be on hot-button issues like drug price reform and vaccines. We remain cautious about this.
The pharmaceutical industry faces the biggest regulatory changes in decades with the Biden administration's Inflation Control Act of 2022, which for the first time allows the federal Medicare health plan to negotiate prices on the most expensive prescription drugs. Ta.
“Nothing kills an investment like uncertainty, and IRAs have introduced a lot of uncertainty into this sector,” Steve Uble, head of industry lobbying group PhRMA, said at the JPMorgan Conference in San Francisco this week. This was stated at a healthcare conference.
PhRMA hopes the new administration will focus less on “attacking the ecosystem” of the industry and instead seek to reduce inefficiencies that will lower costs for patients, he said.
Medicare-negotiated prices for the first 10 drugs were announced last August, and the results were roughly in line with existing prices after discounts and rebates.
The names of the next 15 drugs subject to price negotiations are expected to be announced by February 1st and could be announced this week, but the final list will change after Trump takes office on January 20th. There is a possibility that it will be done.
Last year, the Nasdaq Biotechnology Index fell 3%, while its lead stocks rose 23% and the tech-heavy Nasdaq rose nearly 29%. New York Stock Exchange Arca pharmaceuticals (Tadaul:) The index rose by 1%.
The discrepancy comes despite the stock prices of obesity drug makers Novo Nordisk (NYSE:) and Eli Lilly (NYSE:) hitting all-time highs. Lilly ended 2024 up 31%, while Novo's stock fell 9% after less-than-stellar trial results for its next-generation weight loss drug.
“Growth has been uneven across the industry. There are those who have not.”
Patent expiration date
morgan stanley (NYSE:) estimates that approximately $175 billion of 2025 U.S. large biopharma revenues, or 35% of the total, will be out of patent rights by the end of the decade.
To supplement their revenues, drug companies need new products, either through their own research or by acquiring companies with promising assets, but such deals slowed significantly last year.
According to the IQBIA Human Data Science Institute, mergers and acquisitions in the life sciences sector totaled about $80 billion in the year to November, less than half of the total in 2023. No deals over $5 billion were completed last year.
Expectations that the next Federal Trade Commission chair will be more trade-friendly than Lina Khan are seen as a positive for drug companies.
A series of deals were announced Monday, including a $14.6 billion acquisition by Johnson & Johnson (NYSE:).
Mr. Trump nominated current Secretary of State Andrew Ferguson to replace Mr. Khan. Investors are less enthusiastic about some of Mr. Trump's other high-profile nominations to key positions in the incoming administration.
Beth Neitzel, a partner at Foley Hogue, said, referring to Robert F. “It could certainly have an impact on the company.”
“I think the goal is also to find common ground. Our purpose is to make America healthy,” Biogen (NASDAQ:) CEO Chris Wiebacher said in an interview during the conference. he said.
Pharmaceutical executives exert influence
pfizer (NYSE:) CEO Albert Bourla highlighted the industry's uncertainty during a session at an investor conference, but said Monday that the company will strive to make an impact on the environment.
“There are some people who think the risks outweigh the opportunities for our industry. There are others, myself included, who think the opportunities outweigh the risks. We'll see,” he said. .
“It's hard to predict what's going to happen,” J&J Chief Executive Joaquin Duato told investors, adding that the company would work with the Trump administration to advance policies on innovation and access.
Investors are focused on the impact of government policies on drug prices, such as changes to IRAs that could affect how long individual drugs are eligible for Medicare price negotiations.
Priya Chandran, biopharmaceutical sector leader at Boston Consulting Group, said such changes are hard to implement because they are written into law.
“It's unlikely that anything will change dramatically in the first year,” she says.
Foley Hogue's Neitzel said reports that Trump had a “warm and cordial” dinner with pharmaceutical executives in Florida in December have led to some optimism. Ta.
However, “Mr. Trump and Mr. RFK's past fairly universal statements about drug pricing do not suggest that the incoming Trump administration will be beneficial to the industry,” she said.
