Soumyabrata Roy | Nurphoto | Getty Images
Drugmakers are closing out a yr after they achieved several historic firsts that may shape the pharmaceutical industry in 2024 and beyond.
The burden loss drug market transformed into the pharmaceutical industry’s newest gold rush this yr, as demand for costly but highly effective treatments from Novo Nordisk and Eli Lilly surged. Patients and investors also saw that the advantages of the medicines could extend beyond their original purposes.
The Alzheimer’s disease space also got loads of attention, with the approval and launch of the first-ever treatment proven to slow the progression of the memory-robbing condition.
What’s more, the world’s first vaccines against respiratory syncytial virus rolled out in several markets this fall, and U.S. regulators last week approved the first-ever gene-editing therapy, which might be used to treat sickle cell disease.
Covid vaccines and coverings were the most important losers of this yr, as demand plummeted to latest lows while cases and public concern in regards to the virus dwindled from their pandemic peaks. For the primary time, those products became an infinite burden on the industry, prompting Wall Street to show its focus to the breakthroughs in weight reduction drugs and other treatments.
A latest, controversial policy also rocked the pharmaceutical industry this yr: Medicare drug price negotiations, which aim to rein in prescription drug costs within the U.S. To drugmakers, the policy is a latest headache that might eat into revenue and profits.
Weight reduction drugs soared in popularity
For years, the load loss market was stagnant with products that were ineffective or carried unpleasant unwanted effects. Newer obesity and diabetes drugs similar to Wegovy and Ozempic from Novo Nordisk and Mounjaro from Eli Lilly modified that, raking in billions for the drugmakers and catapulting them to the middle stage of the pharmaceutical industry.
Shares of Eli Lilly are up about 58% this yr, making it the most important U.S. pharmaceutical company based on its market cap of greater than half a trillion dollars. Novo Nordisk’s stock is up about 47% for the yr, and the drugmaker briefly became Europe’s most precious company in September.
Now, some analysts imagine weight reduction and diabetes drugs could grow right into a $100 billion market by 2030.
The recognition of those treatments has even prompted some analysts to take a position that the drugs could reshape other industries, though it’s still unclear what long-term effect they may have on food producers and restaurants, amongst other businesses.
George Frey | Bloomberg | Getty Images
Other drugmakers, including Pfizer and Amgen, are scrambling to capitalize on the load loss drug industry gold rush. Many corporations released early trial results on their experimental obesity drugs this yr, and expect to publish more data in 2024.
But the load loss drug market also faced several hurdles this yr — and the problems aren’t expected to go away in 2024.
High demand pushed Wegovy, Ozempic and Mounjaro into supply shortages. Some analysts expect improvements in 2024 as Eli Lilly and Novo Nordisk increase production capability, but the difficulty could take years to totally resolve.
Also, many U.S. insurers and employers don’t cover weight reduction drugs resulting from fears that the treatments, which cost $1,000 or more per thirty days, will strain their budgets. Medicare is prohibited by law from covering weight reduction treatments, but lawmakers have introduced a bill aiming to alter that.
Leqembi was the Alzheimer’s drug breakthrough
Medicare began covering the treatment, under some conditions, as soon because it was approved, which was a vital step for accessibility. Eisai has priced Leqembi at $26,500 per yr before insurance.
Leqembi isn’t a cure. However the medication slowed cognitive decline from early Alzheimer’s disease by 27% over 18 months in a clinical trial.
The drug, which targets a brain protein related to Alzheimer’s disease, is run twice monthly at specialized treatment centers through intravenous infusion. An injectable, more convenient type of the therapy could possibly be on the horizon.
Jay Reinstein, right, who suffers from Alzheimer’s, sits along with his father, Max Reinstein, prior to receiving a PET scan that may determine whether he’s eligible to take Leqembi, at MedStar Georgetown University Hospital in Washington, D.C., June 20, 2023.
Michael Robinson Chávez | The Washington Post | Getty Images
Eisai and Biogen said the rollout of Leqembi had a slow start this yr, partly because providers needed to determine more treatment centers after the approval.
Eisai reported $2 million in third-quarter sales of Leqembi. Some analysts had projected $12 million in revenue from the drug.
About 800 people had received Leqembi as of Biogen’s third-quarter earnings report in November. That makes Biogen’s goal of 10,000 patients by the tip of March 2024 look increasingly difficult to hit.
But Biogen CEO Chris Viehbacher noted through the earnings call that “this was all the time going to be a gradual launch.”
Covid products sank, while RSV shots gained steam
The once-booming marketplace for Covid products saw a steep drop in demand this yr because the world emerged from the pandemic and started to rely less on protective vaccines and coverings, including a latest round of shots that rolled out this fall.
Covid vaccine makers saw their sales and shares plunge.
Pfizer’s stock is down about 45% this yr and is trading below where it was at the beginning of the pandemic. The corporate announced a sweeping cost-cutting plan before it swung to a loss within the third quarter, largely resulting from inventory write-offs for unused Covid products.
Shares of Moderna have fallen about 50% this yr. Falling revenue is pressuring Moderna’s bottom line, and the corporate posted a loss for 2 consecutive quarters.
Pharmacist Aaron Sun administers Pfizer’s latest Covid vaccine to Jimmy Smagula at a CVS Pharmacy in Eagle Rock, California, Sept. 14, 2023.
Irfan Khan | Los Angeles Times | Getty Images
Each corporations hope that other products, including vaccines against RSV, might help turn things around.
Pfizer and GlaxoSmithKline made history this yr after they launched the world’s first RSV vaccines, which won FDA approval for older adults. Pfizer’s RSV shot for expectant moms, which passes on protection to their fetuses, also won approval this yr.
The rollout of those shots appears to be off to a fast start: GSK in November said its shot pulled in about $860 million in its first few months available on the market and “has a lot of headroom to grow.”
Pfizer in November said its RSV shot raked in $375 million, which was considerably lower than GSK, but the corporate still called it “very fast uptake” that may proceed in 2024.
Meanwhile, Moderna expects the FDA to make a decision whether to approve its RSV shot for older adults in 2024.
Medicare drug negotiations garnered controversy
For the primary time in history, Medicare is beginning to negotiate the costs of prescribed drugs with manufacturers as a part of President Joe Biden’s Inflation Reduction Act.
That controversial process goals to make costly medications more cost-effective for older Americans, however the pharmaceutical industry views the method as a threat to its revenue growth, profits and drug innovation.
The Biden administration in August unveiled the primary 10 drugs that might be subject to cost talks, which include blood thinners from Bristol-Myers Squibb and Johnson & Johnson, and diabetes drugs from Merck and AstraZeneca. The agreed-upon prices for those drugs are scheduled to enter effect in 2026.
First 10 drugs subject to cost negotiations
- Eliquis, made by Bristol-Myers Squibb, is used to stop blood clotting to scale back the danger of stroke.
- Jardiance, made by Boehringer Ingelheim, is used to lower blood sugar for individuals with Type 2 diabetes.
- Xarelto, made by Johnson & Johnson, is used to stop blood clotting, to scale back the danger of stroke.
- Januvia, made by Merck, is used to lower blood sugar for individuals with Type 2 diabetes.
- Farxiga, made by AstraZeneca, is used to treat Type 2 diabetes.
- Entresto, made by Novartis, is used to treat certain sorts of heart failure.
- Enbrel, made by Amgen, is used to treat rheumatoid arthritis.
- Imbruvica, made by AbbVie, is used to treat various kinds of blood cancers.
- Stelara, made by Janssen, is used to treat Crohn’s disease.
- Novo Nordisk’s Fiasp and NovoLog are insulins; multiple variations might be regarded as one drug for the needs of negotiation.
In October, all corporations that make the drugs on the list signed agreements to hitch the negotiations. But greater than a 3rd of the businesses have sued the federal government to halt the negotiations, and most of those cases are still playing out in federal courts across the U.S.
Notably, a federal judge in September denied a preliminary injunction sought by the Chamber of Commerce, one in all the nation’s largest lobbying groups, which aimed to dam the value talks.
The negotiation process officially begins in 2024. Medicare will make an initial drug price offer to manufacturers in February, and the businesses have a month to just accept or make a counteroffer. The negotiations will end in August, with agreed-upon prices published Sept. 1.