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Tag: Bristol-Myers Squibb Co
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Judge rejects J&J, Bristol Myers Squibb challenges to Medicare drug-price negotiations
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Jonathan Raa | Nurphoto | Getty Images
A federal judge in New Jersey on Monday rejected Johnson & Johnson‘s and Bristol Myers Squibb‘s legal challenges to the Biden administration’s Medicare drug-price negotiations, ruling that the program is constitutional.
The decision is another win for the White House in a bitter legal fight with several drugmakers over the price talks. The ruling also weakens the pharmaceutical industry’s strategy of seeking split decisions in lower courts scattered across the U.S., which could escalate the issue to the Supreme Court.
Medicare drug-price negotiations are a key policy under President Joe Biden’s Inflation Reduction Act that aims to make costly medications more affordable for seniors. In doing so, it could take a bite out of drugmakers’ profits. Final negotiated prices for the first round of drugs subject to the talks, which includes one each from J&J and Bristol Myers, will go into effect in 2026.
J&J and Bristol Myers Squibb did not immediately respond to requests for comment on the ruling.
In separate lawsuits, the drugmakers argued that the negotiations are an unconstitutional confiscation of their drugs by the government and a violation of their right to freedom of speech. They also argued that the talks are an unconstitutional condition to participate in the Medicaid and Medicare programs.
But Judge Zahid Quraishi of the District of New Jersey wrote in a 26-page opinion that participation in the price talks and Medicare and Medicaid markets is voluntary.
The negotiations don’t require drugmakers to “set aside, keep or otherwise reserve any of their drugs” for the use of the government or Medicare beneficiaries, he wrote. Quraishi added the talks don’t force manufacturers to physically transmit or transport drugs at a new negotiated price.
“Selling to Medicare may be less profitable than it was before the institution of the Program, but that does not make [J&J and Bristol Myers Squibb’s] decision to participate any less voluntary,” Quraishi wrote. “For the reasons provided, the Court concludes that the Program does not result in a physical taking nor direct appropriation” of medications from the two drugmakers.
J&J, Bristol Myers Squibb, Novo Nordisk and Novartis presented their oral arguments before Quraishi during the same hearing in March.
That same month, a federal judge in Delaware rejected AstraZeneca’s separate lawsuit challenging the negotiations. In Texas, a third federal judge tossed a separate lawsuit in February.
A federal judge in Ohio also issued a ruling in September denying a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the price talks before Oct. 1.
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Cramer's week ahead: Earnings season kicks off after JPMorgan Healthcare Conference
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CNBC’s Jim Cramer on Friday told investors what to watch for on Wall Street next week, highlighting JPMorgan‘s market-moving health-care conference in San Francisco. Taking place from Monday to Thursday, the conference is one of the year’s largest gatherings of major industry CEOs where they reveal earnings guidance and updates on clinical trial research.
“The new year has started with a redistribution of cash out of the ‘Magnificent Seven’ and on to the sidelines,” Cramer said, pointing to health-care stocks as a particularly notable group that will likely be “propelled by what people expect to hear from the JPMorgan Healthcare Conference.”
Cramer will interview several CEOs at the conference, starting with Walgreens CEO Tim Wentworth on Monday. Cramer said he’s interested to hear how the company plans to get its groove back after cutting its dividend nearly in half this week. Cramer will also speak with leadership from Amgen and Medtronic, as well as the new CEO of Bristol Myers, Chris Boerner, whom he’ll ask about the company’s rigorous biotech acquisition plans.
On Tuesday and Wednesday, Cramer will continue to interview the CEOs of major industry names, including Eli Lilly CEO David Ricks. Cramer said he’s particularly interested in the company’s diabetes and weight loss drug as well as its Alzheimer’s initiative. He’ll also speak with CVS Health CEO Karen S. Lynch to discuss the company’s ongoing transition from drug store to health-care provider. Cramer will also hear from the CEOs of Pfizer, Regeneron, Novartis, Abbott Labs and Cencora.
Thursday brings the consumer price index for December. Cramer said he thinks those hoping for soft figures will be disappointed. Cramer will also be tuning into CES, the Consumer Electronics Show, next week. The tech event will include commentary by leadership from Nvidia and Dell.
Earnings season kicks off Friday with reports from major banks including JPMorgan, Bank of America and Wells Fargo. BlackRock will also report, and Cramer said he thinks the company’s earnings could give investors a solid overview of the financial industry. He’ll also be paying attention to Friday reports from UnitedHealth Group and Delta.
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5 things to know before the stock market opens Monday
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Here are the most important news items that investors need to start their trading day:
1. Bond yield boost
U.S. stock futures slid Monday morning as the 10-year Treasury note yield again ticked above 5% — a level it hit Thursday for the first time since 2007. Earnings and inflation data will help to shape whether equities bounce back from a down week. The Dow Jones Industrial Average fell 1.6%, the S&P 500 dropped 2.4% and the Nasdaq Composite shed 3.2% last week. A string of major earnings reports are due Tuesday through Thursday. The personal consumption expenditures data out Friday will offer clues about whether the Federal Reserve will hike interest rates again this year. Follow live market updates here.
2. Tech torrent
The tech sector, which has largely driven market gains this year, will headline a busy stretch of earnings this week. Other key reports will come from the transportation and food and beverage spaces. Investors will focus on General Motors and Ford results as executives will answer questions about the effects of the more than month-long United Auto Workers strike. Here are the major reports this week:
3. Aid arrives in Gaza
The first humanitarian aid convoys since the start of the Israel-Hamas war arrived in Gaza over the weekend, and more shipments of food, water and medical supplies are expected Monday. U.S. President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu on Sunday, and said there will be a “continued flow” of aid into Gaza. Israel intensified airstrikes on the besieged area in recent days, as it holds off on a potential ground invasion. Leaders around the globe are trying to prevent the conflict from turning into a broader war. Follow live updates on the conflict here.
4. Oil consolidation ramps up
5. More Google scrutiny
Another country is probing Alphabet’s Google for potential anticompetitive practices. Japan’s Fair Trade Commission said it would investigate potential antitrust violations related to Google’s search engine and its apps and platforms. The move in Japan follows scrutiny over allegations of anticompetitive conduct in the European Union and United States. A Google spokesperson told CNBC that Android is an open platform that ensures “users always have a choice to customize their devices to suit their needs, including the way they browse and search the internet, or download apps.”
– CNBC’s Lisa Kailai Han, Ruxandra Iordache, Matt Clinch and Arjun Kharpal contributed to this report.
— Follow broader market action like a pro on CNBC Pro.
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Bristol Myers Squibb to buy Mirati Therapeutics in deal worth up to $5.8 billion
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Bristol Myers Squibb Co. said Sunday it will buy Mirati Therapeutics Inc. in a deal valued at up to $5.8 billion.
The pharmaceutical giant announced it will pay $58 a share for Mirati, for a total equity value of $4.8 billion. Mirati stockholders will also receive one non-tradeable Contingent Value Right for each share they hold, potentially worth $12 a share in cash, representing an additional $1 billion of possible value.
Mirati shares closed Friday at $60.20, with the company’s market cap at about $4.21 billion.
Mirati develops commercial-stage oncology therapies, and through the deal, Bristol Myers Squibb will add lung-cancer medicine Krazati, among others, to its portfolio.
“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” Giovanni Caforio, Bristol Myers Squibb’s chief executive and chairman, said in a statement. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals.”
The deal is expected to be dilutive to Bristol Myers Squibb’s non-GAAP earnings per share by about 35 cents a share in the first 12 months after the transaction closes. The merger is expected to close by the first half of 2024.
Bristol Myers Squibb, with a market cap of about $118.4 billion, has seen its shares
BMY,
+0.43%
sink 21% year to date. Mirati shares
MRTX,
-3.49%
are up 33% this year. The S&P 500
SPX,
in comparison, has gained about 12% in 2023.[ad_2]
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Federal judge declines to block Medicare drug price negotiations
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A pharmacist holds a bottle of the drug Eliquis, made by Pfizer Pharmaceuticals, at a pharmacy in Provo, Utah, January 9, 2020.
George Frey | Reuters
A federal judge on Friday declined to block the Biden administration from implementing Medicare drug price negotiations, upholding for now a controversial process that aims to make costly medications more affordable for older Americans.
Judge Michael Newman of the Southern District of Ohio issued a ruling denying a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the price talks before Oct. 1.
That date is the deadline for manufacturers of the first 10 drugs selected for negotiations to agree to participate in the talks.
But Newman, a nominee of former president Donald Trump, also declined to grant the Biden administration’s motion to dismiss the case entirely.
Instead, he asked the Chamber to amend its complaint by Oct. 13 to clarify certain details in the case.
Newman also gave the Biden administration until Oct. 27 to renew its motion to dismiss the case.
He said “a final determination on standing issues will be made following a short (60-day) discovery period and—assuming they are filed—renewed motions to dismiss.”
The ruling from Newman is a blow to the pharmaceutical industry, which views the process as a threat to its revenue growth, profits and drug innovation.
President Joe Biden’s Inflation Reduction Act, which passed in a party-line vote last year, gave Medicare the power to directly hash out drug prices with manufacturers for the first time in the federal program’s nearly 60-year history
The Chamber, which represents some companies in the industry, and drugmakers like Merck and Johnson & Johnson filed at least eight separate lawsuits in recent months seeking to declare the negotiations unconstitutional. But the Chamber’s suit was the only one seeking a preliminary injunction.
Michael Newman, U.S. District Court Judge Ohio
Source: U.S. District Court
The Chamber’s lawsuit argues that the program violates drugmakers’ due process rights under the Fifth Amendment by giving the government the power to effectively dictate prices for their medicines.
The Chamber said an appeals court established a precedent that when the government sets prices, it must provide procedural safeguards to ensure a company receives a reasonable rate and fair return on investment. It stems from the 2001 case Michigan Bell Telephone Co. v. Engler, according to the Chamber.
The Medicare negotiations do not provide these safeguards and impose price caps that are well below a drug’s market value, the Chamber argued.
“There is a very, very high risk, maybe a guarantee, but certainly a very, very high risk, that this regime will result in prices that are unfair,” Jeffrey Bucholtz, an attorney for the Chamber, told judge Newman during a hearing earlier this month.
He added that drugmakers either must agree to the price the government sets, or face an excise tax of up to 1,900% of U.S. sales of the drug.
But lawyers for the DOJ said during the hearing that the program was far from compulsory. Drugmakers can choose the alternative to those two options: Withdraw their voluntary participation in the Medicare and Medicaid programs, according to attorney Brian Netter.
“The measure of relief here is for manufacturers to decide whether they want to stay in the program under the terms that are on offer,” Netter said. “If they choose not to, that’s their prerogative.”
The other suits are scattered in federal courts around the U.S.
Legal experts say the pharmaceutical industry hopes to obtain conflicting rulings from federal appellate courts, which could fast-track the issue to the Supreme Court.
Medicare covers roughly 66 million people in the U.S., according to health policy research organization KFF. The drug price talks are expected to save the insurance program an estimated $98.5 billion over a decade, the Congressional Budget Office said.
In August, the Biden administration unveiled the 10 drugs that will be subject to the first round of price talks, officially kicking off a lengthy negotiation process that will end in August 2024. The reduced prices for those initial medications won’t go into effect until January 2026.
That includes blood thinners from Bristol-Myers Squibb and J&J, and diabetes drugs from Merck and AstraZeneca. It also includes a blood cancer drug from AbbVie, one of the companies represented by the Chamber of Commerce.
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Pharmaceutical trade group sues Biden administration over Medicare drug price negotiations
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Traders work on the floor of the New York Stock Exchange during morning trading, April 10, 2023.
Michael M. Santiago | Getty Images
The pharmaceutical industry’s largest lobbying group and two other organizations Wednesday sued the Biden administration over Medicare’s new powers to slash drug prices for seniors under the Inflation Reduction Act.
Pharmaceutical Research and Manufacturers of America, along with the National Infusion Center Association and the Global Colon Cancer Association, argue that the Medicare negotiations with drugmakers violate the U.S. Constitution, in a complaint filed in federal district court in Texas.
PhRMA represents many of the largest drugmakers in the world, including Eli Lilly, Pfizer and Johnson & Johnson.
The groups asked the court to declare the program unconstitutional and prevent the Department of Health and Human Services from implementing Medicare negotiations without “adequate procedural protections” for drug manufacturers.
HHS did not immediately respond to CNBC’s request for comment.
It marks the fourth lawsuit challenging the controversial provision of the Inflation Reduction Act, which became law last summer in a major victory for President Joe Biden and Democratic lawmakers.
The policy aims to make drugs more affordable for older Americans but will likely reduce pharmaceutical industry profits. Merck and Bristol Myers Squibb — who are also represented by PhRMA — and the U.S. Chamber of Commerce filed separate lawsuits against the provision earlier this month.
The latest lawsuit argues the plan delegates too much authority to the HHS.
PhRMA and the two organizations also argue that the provision includes a “crippling” excise tax aimed at forcing drugmakers to accept the government-dictated price of medicines, making it an excessive fine prohibited by the Eighth Amendment.
The lawsuit also argues the policy violates due process by denying pharmaceutical companies and the public input on how Medicare negotiations will be implemented.
“The price setting scheme in the Inflation Reduction Act is bad policy that threatens continued research and development and patients’ access to medicines,” PhRMA CEO Stephen Ubl said in a statement.
“It also violates the U.S. Constitution because it includes barriers to transparency and accountability, hands the executive branch unfettered discretion to set the price of medicines in Medicare and relies on an absurd enforcement mechanism to force compliance,” Ubl said.
The first 10 drugs the provision applies to will be chosen in September, with the agreed prices taking effect in 2026.
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Bristol Myers Squibb sues Biden administration over Medicare drug negotiations in third such lawsuit
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Bristol Myers Squibb on Friday sued the Biden administration over Medicare‘s new powers to slash drug prices, the third such lawsuit to be filed against the program in a matter of days.
The lawsuit filed in federal district court in New Jersey argues the Medicare negotiations violate the First and Fifth Amendments of the U.S. Constitution.
Bristol Myers Squibb has asked the court to declare the program unconstitutional and prevent the Health and Human Services Department from forcing the company to enter negotiations.
Bristol Myers Squibb’s arguments mirror those lodged last week by Merck, the first company to sue the federal government over the drug negotiations. The U.S. Chamber of Commerce has also sued HHS over the program with similar arguments.
The Inflation Reduction Act, passed in 2022 in a narrow party-line vote, empowered Medicare to negotiate drug prices for the first time in program’s six-decade history. The law is the central pillar in the Biden administration’s efforts to control rising drug prices and was a major victory for the Democratic Party.
Bristol Myers Squibb said its blood thinner Eliquis, used to treat clots and strokes, will be subject to the negotiations this year. The company generated $11.8 billion in revenue from Eliquis last year, about 25% of the company’s $46 billion in total revenue for 2022.
The drugmaker also said Opdivo, used to treat several types of cancer, will be subject to the Medicare negotiations in the future. Opdivo generated $8.2 billion in sales for the company in 2022, which made up about 18% of the drugmaker’s total revenue for that year.
Bristol Myers Squibb argued that the federal government is forcing the company to enter negotiations and eventually agree to a heavily discounted price. The company claims this violates 5th Amendment protections against the government seizing private property without just compensation.
The drugmaker also claimed HHS is forcing the company to publicly present the program as a negotiation over a fair price. The company called the negotiations a sham and claimed the federal government is forcing the drugmaker to “parrot its preferred political messaging” in violation of the First Amendment.
HHS Secretary Xavier Becerra, in a statement after Merck’s lawsuit last week, vowed to vigorously defend the Inflation Reduction Act in court, saying, “The law is on our side.”
White House Press Secretary Karine Jean-Pierre, also in a statement after Merck’s suit, said the Biden administration is confident it will win in court.
“There is nothing in the Constitution that prevents Medicare from negotiating lower drug prices,” Jean-Pierre said.
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