BIG PHARMA EARNINGS WATCH: MERCK, NOVARTIS & PFIZER

Brand Name Drug Companies Beat Wall Street Expectations After Repeatedly Hiking Prices

New earnings reports for the third quarter of 2020 show that Big Pharma giants are continuing to rake in profits while hiking prescription drug prices. On Tuesday, Big Pharma drug companies Merck, Novartis and Pfizer announced earnings for the third quarter that bested Wall Street expectations after hiking prices this year.

Merck

• Profits for the brand name drug company rose to $2.94 billion, surpassing analysts’ expectations.
• This quarter, Merck reported a revenue of $12.55 billion – beating analysts’ expectations.
• Strong sales were driven by cancer drug Keytruda which jumped 21 percent in Q3 to $3.7 billion.
• Over the last four quarters, Merck has surpassed Wall Street expectations four times.

• Novartis’ Q3 earnings handily beat analysts’ estimates.
• Novartis’ sales rose to $9.8 billion and were largely driven by blockbuster skin and arthritis drug Cosentyx, heart drug Entresto and gene therapy drug Zolgensma.
• Cosentyx accounted for $1.02 billion in sales for the company – up from $944 million in the previous quarter.
• Entresto contributed $632 million in sales – up from $580 million the previous quarter, and Zolgensma contributed $291 million in sales – up from $205 million in quarter two.

• Pfizer reported a profit of $2.19 billion and a revenue of $12.13 billion this quarter – topping analysts’ expectations.
• Sales also grew for Pfizer’s biopharma sector. The brand name drug company’s biopharma revenue increased four percent.
• Sales were driven by top-selling blood-thinner drug Eliquis and breast cancer drug Ibrance.

• Already this year Merck has increased prices 45 times, including on diabetes medicines Januvia and Janumet and block-buster cancer drug Keytruda.
• The brand name company also raised the price of HIV therapy treatment Insentress by five percent.

• Novartis increased the price of chemotherapy treatment Jakafi this summer, during the height of the coronavirus pandemic.
• Novartis has increased prices on nearly 30 drugs already this year, 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.

• “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)

• Pfizer has already hiked prices over 126 times this year, including this summer during the height of the coronavirus pandemic.
• Breakout drug Vyndaqel is estimated to “become among the most costly cardiovascular treatments ever,” according to the Institute for Clinical and Economic Review (ICER).
• Pfizer has already hiked the price of Eliquis by 6 percent, Ibrance by 5 percent and Xeljanz by 5 percent this year.
• Price hikes on Lyrica were not supported by new clinical evidence and accounted for an unnecessary increase in U.S. drug spending of nearly $700 million from 2017-2018 according to ICER.

See how brand name drug company Johnson & Johnson beat Wall Street expectations after hiking prices on American patients HERE.

Stay tuned this week as we continue to monitor Q3 earnings announcements from brand name drug companies.