The drug pricing debate is raging on in Washington, D.C., and that's part of the reason Bristol-Myers Squibb wants to nab Celgene, CEO Giovanni Caforio told analysts Thursday.
Like other pharma watchers, Caforio is uncertain about the fate of proposals making their way around the halls of Congress and in the White House. But he promises the company’s Celgene buy will help the company fortify its position regardless of what lawmakers decide.
Asked about this week’s bipartisan Senate drug pricing bill on Bristol's conference call Thursday, Caforio said the situation is “fluid” in Washington. A debate over pricing has been burning for years, but it's still “early days” in the conversation, Caforio figures.
Still, the CEO believes “we are at the beginning of a period of change from a policy perspective," adding that he supports measures to help patients afford their drugs.
While it’s unclear what exactly lawmakers will do to fight drug prices—and whether those measures will hit pharma hard—the conversation will surely intensify as next year’s U.S. elections near. As Caforio sees it, Bristol's $74 billion Celgene buy will give BMS a more diversified portfolio, more growth opportunities and launches, and additional drugs in various reimbursement channels.
That diversity will be important if lawmakers decide to limit the industry's pricing in one channel or another, he argued. For instance, some proposals would hit Medicare Part B—which covers physician-administered drugs—while others focus in on Medicare Part D, which covers pharmacy-dispensed meds. Caforio said the buyout is “more important” given uncertainties in Washington.
This week, Senate Finance Committee Chair Chuck Grassley and ranking Democrat Ron Wyden revealed their drug pricing reform proposal, following countless other bills in recent years. The latest measure aims to lower patients’ share of drug costs in Medicare Part B and D and forces new rebates on branded drugmakers that raise prices more than the rate of inflation.
It’s one among many proposals making their way around Washington, D.C. House Speaker Nancy Pelosi has said she’ll release a bill in September, and the White House is reportedly working on a new executive order of its own.
Since taking office, President Donald Trump has blasted the pharma industry on pricing, and his administration has worked to fight price hikes, although increases continue. Two of Trump's moves cratered earlier this month when a court blocked an order forcing drug prices into TV ads and the administration itself withdrew a bid to overhaul drug rebates.
Bristol-Myers Squibb aims to close its Celgene deal in late 2019 or early 2020. As part of the deal, the company must offload psoriasis med Otezla in a process that should generate "significant bidding interest," BMS execs said Thursday.