Pricing in the multiple sclerosis arena may have held in Q3 for Biogen, but to one analyst, it doesn’t sound like that’s going to continue.
On Biogen’s earnings conference call, execs wouldn’t discuss formulary access for 2017, despite the fact that contracting is now “mostly complete,” Bernstein analyst Ronny Gal pointed out in a recent note to investors.
Instead, Chief Commercial Officer Michel Vounatsos told shareholders that the Big Biotech was “committed to continue to generate profitable growth,” and that it intended to do that by “building a new go-to-market model” that would “go after the cost picture forcefully.”
The way Gal sees it, that strategy is concerning. “This sounds a lot like 'pressure is coming and we are reducing our cost structure to handle it,’” he wrote.
He’s not the only analyst that’s predicted a larger payer squeeze is coming--especially since there’s already one underway. Formularies of 2016 showed a big slide in overall MS coverage, thanks to soaring prices; they sank to 54% from 69% in 2015, and he expects “a round of price correction” whenever an additional product hits the market from here on out, he said in June.
And there are plenty of those on the way, including a closely watched one from Roche. Its candidate ocrelizumab, to be marketed as Ocrevus, has shown it’s the first med that can improve the condition of patients with primary progressive forms of MS, meaning it’ll give companies such as Biogen a run for their money.
Meanwhile, though, the Massachusetts drugmaker is hanging in there. MS pricing grew 2.5% year-over-year in Q3, helping Biogen top consensus with a $2.28 billion sales mark for the period.