- As the Trump administration pushes for more transparency on list prices in direct-to-consumer advertising, pharma giant Johnson & Johnson expects drug pricing will evolve next year — although not as drastically as some may think.
- "On the pricing front overall, I think as we look into 2019 and what we’re seeing in the contracts, I think we’re going to see a continued evolution in some of the categories where there are a very high level of competitors. But it will be an evolution in pricing, not a revolution or a step change," Jennifer Taubert, global head of J&J's pharmaceuticals unit, said on a Tuesday morning earnings call, adding that payers remain intently focused on pricing in heavily contracted therapeutic areas.
- J&J recorded $10.3 billion in pharma sales for the third quarter, up 6.7% compared to the same period a year prior. Helping drive that growth were cancer medications Zytiga, Imbruvica and Darzalex and the anti-inflammatory Stelara.
First approved in 2011, Zytiga (abiraterone) has become J&J's top-selling cancer product and the leading source of growth for its oncology portfolio. The prostate cancer medication raked in $1.75 billion for the big pharma during the first six months of 2018, a year-over-year increase of 62%.
Yet Zytiga's upward trajectory has — at least over the past few years — largely come from price hikes, according to a recent report from Leerink. The investment bank determined that price increases were responsible for 96% of the drug's U.S. revenue growth between 2014 and 2017.
J&J made sure to note both on a second quarter earnings call and the third quarter presentation Tuesday that its pharmaceutical unit would be performing admirably even without Zytiga's contribution. Still, the drug exemplifies how integral pricing, and price increases, can be to a product's success.
Lawmakers and regulators are trying to better understand this dynamic, particularly amid the recent outrage over sky-high list prices. On Monday, they made one of the most concrete steps toward greater transparency, with the Department of Health and Human Services announcing a proposal that would require drug companies to include in television ads the wholesale acquisition cost of the product they're marketing if it's covered through Medicare and Medicaid.
"Sometimes markets evolve on their own, but sometimes, it takes government to make the first move, to disrupt a broken system, and lay down new rules of the road," said HHS Secretary Alex Azar in a speech announcing the proposal.
The proposal was unveiled just hours after members of industry trade group PhRMA said they would voluntarily provide in drug TV ads information that directs consumers to a place where they can learn about the cost of the drugs being marketed. Members didn't, however, agree to include list prices in the ads.
J&J's Taubert touted how the company has been releasing annual pricing transparency reports and plans to fall in-line with the new PhRMA principles.
As for the HHS proposal, there was more hesitancy.
"I think that anything that is helpful and useful to patients and helps put all the information into context is going to be really good for them," Taubert said.
"I think we just need to be careful; things such as list price alone is not the full extent of the information and we would worry about patients not going to their doctor to seek care, not going in for their appropriate treatments," she added. "So we believe we're doing the right thing with the PhRMA proposal, and we'll just have to wait and see what happens with Secretary Azar's proposal that he announced yesterday."