BIG PHARMA EARNINGS WATCH: ASTRAZENECA

AstraZeneca’s Q3 Earnings Report Shows Pandemic Price Hikes Profitable for Brand Name Drug Maker

A late third-quarter earnings report from brand name drug makers AstraZeneca shows once again that the pandemic has proven hugely profitable for Big Pharma. AstraZeneca followed other Big Pharma giants that performed well in the third quarter of the year after hiking prices on products in their portfolios throughout the pandemic.

AstraZeneca

• AstraZeneca reported revenue and sales that topped Wall Street expectations for the quarter.
• The company reported third-quarter revenue rose a whopping 50 percent to $9.9 billion. Revenue for the first nine months of the year was up by nearly one-third, to $25.4 billion.
• Strong sales were driven by the company’s oncology portfolio, which rose 18 percent year over year. Oncology drug Tagrisso performed particularly well, bringing in $1.25 billion in the quarter.
• In addition, the company announced it would be switching to a for-profit model for sales of its COVID-19 vaccine. Originally, the company agreed to sell the vaccine for no profit in a deal it made with Oxford University, which co-developed the drug.

• The brand name drug maker has hiked prices on at least 22 medications so far this year.
• Last summer, AstraZeneca increased prices on more than 18 different drugs at the height of the pandemic – including on popular cholesterol drug Crestor and blockbuster drug Symbicort.
• The company has hiked prices on products in its portfolio at least three times during the COVID-19 pandemic.

• AstraZeneca Was One Of Several Companies To Participate In Big Pharma’s Biennial Price Hikes This Summer – despite the unprecedented economic uncertainty facing millions of Americans grappling with the pandemic – by increasing prices on 18 drugs, including on popular cholesterol drug Crestor and blockbuster drug Symbicort. (Tori Marsh, “Live Updates: July 2020 Drug Price Increases,” GoodRx, 8/3/20)
• In Anticipation Of Generic Competition For Its Blockbuster Anti-Ulcer Drug Prilosec, AstraZeneca, “Introduced And Pushed Doctors To Prescribe” A New Drug “Which Was Only Slightly Chemically Different From Prilosec But Had 13 Years Of Patent Protection Left.” The Report Estimates The One-Year Cost Of This Product Hop To Be Almost $2.4 Billion. “The anti-ulcer drug Prilosec was, at one time, the top drug by sales in the United States. In 2000, before its scheduled patent expiration the following year, Prilosec sales reached $4.1 billion (NIHCM Foundation, 2001). In anticipation of generic competition for its blockbuster product, AstraZeneca, Prilosec’s manufacturer, introduced and pushed doctors to prescribe its new anti-ulcer drug, Nexium, which was only slightly chemically different from Prilosec but had 13 years of patent protection left. A lawsuit alleging that AstraZeneca engaged in anticompetitive behavior with Prilosec and Nexium was dismissed in early 2008 when a district court found that AstraZeneca “did not eliminate consumer choice” (Callan, 2015). But antitrust experts have pointed out that the court’s reasoning ignores “the realities of drug markets,” where a prescription for a single-source brand drug removes the option of a generic version (Carrier and Shadowen, 2016).” (Alex Brill, “The Cost of Brand Drug Product Hopping,” Matrix Global Advisors, 9/11/20)
• As AstraZeneca Faced Generic Competition To Its High Cholesterol Drug Crestor, Its “Price Was Increased Several Times Before The Generic Came Out … Including By About 15 Percent Right Before.” “AstraZeneca’s AZN, -0.08% drug Crestor, another of the drugs featured in the report, is a popular but expensive drug that treats high cholesterol. In 2016, when the drug first got a new generic rival, the branded product cost about $300 a month without insurance coverage. The price was increased several times before the generic came out … including by about 15% right before. (AstraZeneca said it could not comment because it was not involved in the study.)” (Emma Court, “Big Pharma Games The System To Make Generic Drugs More Expensive,” MarketWatch, 8/3/18)
• AstraZeneca’s Pricing Strategy Served To Create “A New, Higher Baseline Price When The Generic Hits The Market.” (Tori Marsh, “Prices For Brand Drugs Spike Before A Generic Is Released. Here’s Why.,” GoodRx, 7/27/18)
• After Increasing Drug Prices By As Much As Nine Percent, On A 2018 Earnings Call, Soriot Insisted The Company Was “Sensitive” To Drug Pricing Concerns And Said It Had Raised “Wholesale Prices Earlier [That] Year By ‘Very, Very Modest’ Amounts.” “During an earnings conference call, the AstraZeneca chief executive disclosed the company would not raise prices in the U.S. for the rest of year. Other drug makers have taken the same step in response to pressure from the Trump administration, but he insisted this was ‘our plan … all along’ … He maintained AstraZeneca was sensitive to the problem by raising wholesale prices earlier this year by ‘very, very modest’ amounts, ‘between 1 and 3 percent’ which, he said, was ‘in line with inflation.’” (Ed Silverman, “When Modest Is Actually Excessive: AstraZeneca Spins Its Price Hikes,” STAT News, 7/26/18)

Read more on Q3 earnings from Johnson & Johnson and Roche HERE.

Read more on Q3 earnings from Novartis, Merck, GlaxoSmithKline and Bristol-Myers Squibb HERE.

Read more on Q3 earnings from Sanofi, AbbVie, Pfizer and Amgen HERE.

Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.