- CNBC Screenshot
Almost a year after pharmaceutical price hikes became the focus of national attention with Turing Pharmaceuticals’ 5,000% overnight increase of the drug Daraprim, it remains a big issue in the US.
In August, Mylan, the company that makes the EpiPen, came under fire from politicians and the public for its 500% increase since 2007 in the list price of the emergency allergy medication.
The announcement has prompted investigations, plans to stop future extreme price hikes, and Mylan to make some moves to increase access to the medication. Some of Mylan’s actions include a savings card for $300 off the $600 list price for those with commercial insurance, and a $300 authorized generic version that is in the works.
The focus on drug pricing – and in particular Democratic presidential nominee Hillary Clinton’s plan, if elected, to institute a panel that would take on “unjustified” price hikes – prompted Morgan Stanley to issue a report on how this policy would affect the pharmaceutical industry overall.
“We see this Clinton proposal as focused on non-innovators, but innovative companies could still face scrutiny in the future,” the note said.
In particular, specialty pharmaceutical companies and some biotechnology companies are especially at risk of drug pricing issues.
If companies don’t raise the prices of their drugs in the US, those with the largest risk to their earnings are Horizon (a potential earnings-per-share impact of 9%); Mallinckrodt and Valeant (8% each); and AbbVie, Bristol-Myers Squibb, and Eli Lilly (all at 7%).
- Morgan Stanley screenshot