EUR 9270.56 For Business Accounts Only

Global Pharmaceuticals - Understanding the Seemingly Impossible US Pricing Environment

The US drug environment is immensely complicated yet we have tried to garner a holistic view of the entire market and show that large swathes of drug spend will be very difficult for payors to target. Furthermore, we show that if a President were to garner sufficient support for changes to Medicare and not have those changes watered down, the worst case would be an 8% hit to EU Pharma EBIT. Our analysis shows that whilst some segments could be hit particularly hard, the outlook for EU Pharma in the US remains robust.

PBMs Unable to Control Spend Growth – Despite the increased aggression from the 3 major PBM’s, both CVS and Express Scripts expect ongoing double-digit sales growth. Express Scripts expect 17% Specialty sales growth in 2017 & 18 and 13-14% sales growth across the entire market.

Hospital Administered Drugs are Safe from Pressure – We have calculated that drugs administered in hospital account for around 25% of all drug spend. We discuss in detail why it will be difficult for either Government or PBMs to target this spend given the ‘buy & bill’ process for reimbursement.

Specialty Drugs are 45% of all Spend – This category is more difficult for PBMs to target and pricing power is much more robust. We show Specialty Care is growing rapidly & bodes well for pricing power.

European pharma pipelines are low risk - We examine European large cap pharma pipelines and show that they are developing drugs which we would class as being at low risk from US pricing pressure. Moreover, we examine global large cap pharma with a view to ranking US pricing exposure in terms of the proportion of sales that are specialty care vs primary care.