Commercialization

When BridgeBio Pharma prepared to sell the heart drug Attruby on its own, investors and analysts were skeptical. The San Francisco-area biotechnology firm was competing with two large companies with experienced sales forces, and its chances of success seemed slim.

Optimistic investors believed BridgeBio, at best, could rake in $100 million in sales for the year. But Attruby easily blew past those projections, earning $362 million in 2025 and proving BridgeBio a viable threat to its bigger rivals.

Now, those analyst notes — the skeptical and the optimistic — are framed in the background of a room in BridgeBio’s San Francisco office, where Matt Outten, its chief commercial officer, sometimes takes meetings. “When people come in, they see the good ones, and also the ones where people are like, ‘you could never do it,’” Outten told BioPharma Dive. “The nice thing is, I'm starting to have to replace the early notes with the positive ones.”

Biotechs spend hundreds of millions, if not billions, to develop a medicine. Most will fail, and those that don’t often end up selling the rights to their drug — or the entire firm — to a partner with the budget and sales force to launch their product. Investors historically bet on those deals and against the companies that try to market their own drugs, a “short the launch” approach built on decades of skepticism.

But over the past few years, more have grabbed at the proverbial brass ring. Among them are companies like Argenx, BridgeBio, Insmed and Madrigal Pharmaceuticals, which have all proven they can sell medicines better than investors expected. In the process, they’ve joined the ranks of the sector’s more valuable companies, rewarding the shareholders who stuck around for the journey.

“For companies with significant products, investors are becoming more willing to tolerate slower launch ramps,” said Michael Rome, a managing director at Foresite Capital.

Biotech companies make many tough strategic decisions early on, from which diseases to target to how to finance themselves. But as they mature, they’ll all confront the critical choice of whether to sell their own drugs.

Forging ahead and succeeding could offer big financial upside, enabling a young drugmaker to grow into a large and profitable company. Yet that’s an expensive undertaking that requires patient investors.

One company facing this question is Alumis, which will apply later this year for approval of envudeucitinib, a competitor to Bristol Myers Squibb’s psoriasis treatment Sotyktu. The biotech’s shares have skyrocketed since it revealed data showing its drug may be not only superior to Sotyktu, but among the best in an emerging class of therapies. That drug is also in testing for other autoimmune conditions such as lupus.

At peak, envudeucitinib could bring in $1.7 billion in annual sales in psoriasis alone, according to one forecast by the investment firm Leerink Partners. But bringing the drug to market would be a costly endeavor, as footing the bill for direct-to-consumer advertising is a difficult expense for a company of Alumis' size to handle, said Martin Babler, Alumis’ CEO.

To “maximize that opportunity,” Babler said, “that is more likely going to be done with a partner than on our own.”

LB Pharmaceuticals is making similar calculations. CEO Heather Turner told BioPharma Dive in January that the company, which has a schizophrenia drug in late-stage testing, is weighing whether it can market its own medicines. In securities filings prior to going public, LB made the case that its drug could outperform approved schizophrenia treatments, among them Bristol Myers’ Cobenfy. "We think it is a nice, large market opportunity, which helps, but it is one in which a biotech company could credibly launch,” Turner said.

Turner was previously the CEO of Carmot Therapeutics, an obesity specialist that eventually sold to Roche for $3.1 billion. Had that company considered marketing its own drugs, “people probably would have laughed at me,” she said.

Still, some are considering doing so. One is Kailera, a well-funded obesity drugmaker that recently raised one of the sector’s biggest-ever initial public offerings. It's advancing a portfolio led by ribupatide, a weight loss treatment that it’s hoping will compete with Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. CEO Ron Renaud — who has led and sold three other biotechs — previously said the company built into its hiring plans the expertise needed to lead future drug launches. At least as of now, the company intends to sell its own medicines one day.

“We’ve got a chief medical officer who has developed blockbuster cardiovascular drugs in the past,” Renaud said. “We have that experience internally. So the idea is to take this as far as we can with the skill sets that we have.” 

Companies with such ambitions have recent positive examples indicating that kind of plan can yield a stable, profitable business investors will buy into. The drug Ohtuvayre was off to an exceptionally fast launch in a kind of lung disease when its developer, Verona Pharma, was acquired by Merck & Co. for $10 billion in 2025. Argenx commands a nearly $50 billion market cap thanks to the sales growth of the immune drug Vyvgart. Others, such as Insmed and BeOne Medicines, are approaching similar valuations thanks to rapidly growing franchises.

Other biotechs are showing they might reach those heights, too.

Madrigal surprised investors with the early sales trajectory of Rezdiffra, the first drug approved for metabolic dysfunction-associated steatohepatitis, or MASH. Prior to that clearance, there was skepticism about Rezdiffra’s benefits and the market potential for MASH drugs.

Yet Madrigal’s first-mover advantage and strong uptake caused sales of Rezdiffra to outstrip analysts’ expectations. The drug reached $180 million in its first year on the market and almost $1 billion in 2025. Along the way, Madrigal’s value soared. Even with a stock decline this year, the company is worth around $12 billion.

BridgeBio, meanwhile, brought a drug for the progressive heart condition transthyretin amyloidosis cardiomyopathy to market when one, Pfizer’s tafamidis, was already available and another, from Alnylam Pharmaceuticals, was soon following. But BridgeBio compiled data suggesting its drug might be more potent than tafamidis and priced the therapy at a discount. It also adopted a series of marketing strategies to “lower the bar” for access, BridgeBio CEO Neil Kumar previously told BioPharma Dive.

“It takes some bravery and Wild West attitude to think that you can do it even when so many other people have not,” BridgeBio’s Outten said.

The uptake of Attruby has accelerated in 2026. BridgeBio is now worth more than $13 billion.

These stories, some analysts say, represent a maturation for the sector that may have been accelerated by a tough environment. Up until late last year, biotech suffered through a lengthy pullback in funding and dealmaking that forced many developers to spend more frugally to survive, said RBC Capital Markets analyst Luca Issi.

According to Issi, these kinds of cost-controlling maneuvers have better prepared companies to profitably sell medicines — positioning them to reward shareholders without agreeing to a takeover.

"Most biotech companies graduate middle school and get bought," Issi said. "These guys graduated college and they have their own jobs. They got their PhDs and MDs."

Mergers and acquisitions are still a core part of the biopharmaceutical sector. Large pharma companies often snap up biotechs to get ahold of new drugs that can grow revenue or offset patent expirations. This year, more than 20 buyout deals have already been struck, the majority of which were worth at least $1 billion, according to BioPharma Dive data.

An April report from Stifel described the fast start as the sector’s second most active year, ever, for M&A.

Issi contends that biotech’s evolution could, at minimum, give younger firms more leverage in deal negotiations. But others also note how there are now enough recent examples of drugmakers successfully launching new medicines to credibly argue that more should try.

“It’s taken longer than I initially thought it would take, but it's a good thing,” said Mani Foroohar, an analyst at Leerink. “The universe of companies that people think of as ‘grown-up,’” he added, “is expanding.”

Those success stories could also make biotech more appealing to the “generalist” investors that have long seen biotech as a crapshoot, RBC’s Issi said.

“There's this perception from generalists that biotech is just like playing in a casino, like you gamble on who gets bought,” Issi said. “But the broader sector is in much better shape because we have more companies that have self-sustainable businesses.”

A new round of pricing deals between the White House and pharmaceutical companies will have negligible effects on sales and profits for the industry while offering relief from government threats, Wall Street analysts said.

In December, President Trump announced agreements with nine more drugmakers that he said would significantly lower the prices of prescription medicines. 

The companies each made separate deals to offer discounts on specific drugs, many of which were already heavily rebated or nearing the end of their exclusivity. In return, the companies will receive three years of relief from Trump’s tariffs.

The deals amount to “another round of pandering on carefully selected drugs,” William Blair analyst Matt Phipps wrote in a note to clients. While the medicines will be offered at discounts for those who pay cash, there’s unlikely to be a significant difference in net prices, he said. The cash prices will likely be well above typical co-pays, meaning people with insurance will buy drugs the same way as in the past.

Indeed, one of the companies involved in the latest round of negotiations, Gilead Sciences, said it expects “the financial impact to be manageable in 2026 and beyond.” That’s likely true of all nine deals, Phipps said, telling clients he does not expect “significant impacts on the companies’ growth prospects.”

For their part, investors continue to push pharmaceutical and biotech stocks higher. Pharma and biotech indexes rose for much of 2025, since dipping last April as Trump threatened the industry with “major” tariffs. The threats led to a flurry of announcements of planned investments in U.S. manufacturing, but in the end the tariffs came with exemptions that significantly blunted their impact.

The latest deals are part of Trump’s push to bring “most-favored-nation,” or MFN pricing to pharmaceuticals. The idea is to align costs for U.S. consumers with those in countries that have price controls. In July, Trump sent letters to 17 large drugmakers giving them 60 days to lower prices or face government action.

Pfizer, AstraZeneca, Eli Lilly, Novo Nordisk and EMD Serono previously struck deals with the White House before December’s batch of agreements with Gilead, Merck & Co., Amgen, Bristol Myers Squibb, GSK, Novartis, Sanofi, Genentech, and Boehringer Ingelheim. Johnson & Johnson and AbbVie followed in early 2026.

In addition to specific drug pricing deals, the White House claimed the agreement will “ensure foreign nations can no longer use price controls to free ride on American innovation by guaranteeing MFN prices on all new innovative medicines the nine companies bring to market.”

It’s unclear how that provision will be enforced. And at least one company, Bristol Myers, said its deal means it “will not be subject to future pricing mandates.” The agreements also appear to have offered additional special enticements, with the Food and Drug Administration announcing national priority vouchers for speedy reviews for two Merck experimental drugs on the same day.

The lack of transparency on the negotiations has led Democrats to cry foul. Four top lawmakers sent letters to AstraZeneca, Lilly, Novo and Pfizer seeking information. “Skepticism and scrutiny are warranted as the Trump Administration has repeatedly made announcements that fail to meet their stated goals and instead only increase costs on the consumer,” they said.

Sponsored content

By mama health

Somewhere in the shared drive of every pharma commercial team, there is a patient journey map. It was probably built two years ago, from interviews with twelve KOLs, a panel of fifteen patients, or social listening that tells you nothing. Yet it still shapes how the next launch gets planned.

That deck informs brand positioning. It feeds market access submissions. It anchors HCP materials, patient support programs, and the narrative medical affairs takes to advisory boards. For a document referenced this many times by this many functions, the methodology underneath it is remarkably thin. A handful of expert interviews. A small patient panel. A workshop or two. Then a slide deck expected to hold up against years of market change.

It almost never does.

The patient reality moves faster than the map

Treatment options change. Diagnostic criteria evolve. Competitors launch. Patient communities form online and shift in months. By the time a launch team is opening the journey map deck to inform brand strategy, the document often describes a patient that no longer exists.

This is one of the quieter reasons launches underperform. Industry analyses from McKinsey and Deloitte put the launch failure rate at around 60%, with lack of patient insight cited among the top drivers. Behind that statistic sits a more specific issue. Commercial decisions get made on patient understanding that was already stale by the time strategy was set.

A different approach is taking hold

Some commercial teams have started building the patient journey differently. Instead of a one-time panel of fifteen patients, they're working with continuous input from thousands of patients, structured by AI and refreshed in near real time.

The journey captures how patients describe their symptoms in their own words. Where they get stuck during diagnosis. What drives their treatment decisions, how they experience side effects, and what changes as their care evolves. The map doesn't sit in a shared drive waiting to be opened. It updates as the underlying reality moves.

What changes inside commercial planning

When the patient journey is a live document rather than a static one, the inputs underneath launch strategy change too.

Launch teams plan against the patient reality as it currently exists, not as it looked when research was commissioned eighteen months earlier. Brand teams source messaging from how patients actually describe their condition, refreshed often enough to keep up. Market access teams ground their value narratives in quantified patient evidence rather than extrapolating from small qualitative panels. HCP materials and patient support programs adapt to issues patients are surfacing now.

These shifts are already reshaping how commercial teams think about brand planning, HCP engagement, and real-world evidence strategy across pharma.

Some companies have already made the shift

A growing number of pharma commercial teams have rebuilt their patient understanding around AI-powered patient interviews at scale, conducted continuously across thousands of patients rather than a handful. Across our engagements at mama health, this methodology now runs underneath launch planning, brand strategy, payer dossiers, and patient support programs for top-twenty pharma teams across more than fifteen therapy areas and sixteen markets.

These teams operate on a different input than their competitors. Their patient journeys are not three years old. Their brand messaging reflects how patients describe their condition this quarter. Their access teams walk into payer conversations with quantified patient evidence behind every claim. The difference shows up where it matters. Launches hold their trajectory through the first six months. Brand strategies survive competitive entry. Payer conversations move faster.

The companies still working from the older methodology are competing against this. Same therapeutic areas. Same launch windows. The difference is a fifteen-person panel from two years ago against a thousand patients structured into a live AI-powered intelligence layer.

The patient journey isn't a slide anymore

Inside the launches that beat forecast, the patient journey is no longer a deck. It's a live infrastructure the whole organization plans against, refreshed continuously as the patient reality moves. The launches that miss forecast are built on patient understanding that's already out of date. The ones that beat forecast are built on patient understanding that kept up.

 

The Trump administration in April revived tariffs on imported pharmaceuticals, applying 100% levies on drugs under the authority of a trade law that seeks to secure domestic production for national security.

However, the White House’s announcement exempted a wide array of drugs imported from countries that have already signed trade deals with the U.S., by companies that have agreed to pricing and manufacturing onshoring deals, along with all generics and biosimilars.

The announcement “removes a policy overhang” on biopharma companies that has existed since the Commerce Department initiated its investigation nearly a year ago, wrote RBC Capital Markets analyst Trung Huynh in a note to clients. “The policy is designed to reward cooperation, and almost every major drugmaker cooperated,” Huynh wrote.

The agreement exempts those companies that have agreed to spend a collective $400 billion to build manufacturing and other facilities in the U.S., as well as agree to “most favored nation” deals that aim to equalize drug prices with other countries. More than a dozen companies have made such deals.

In addition, drugs manufactured in the European Union, Japan, Korea, Switzerland and Liechtenstein, which have already secured trade deals with the U.S., would be subject to a 15% tariff, which Huynh called “manageable.” Drugs manufactured in the U.K. will also have a lower rate that the White House didn’t specify, subject to a separate agreement.

Generic and biosimilar drugs, or their ingredients, won’t be charged any levies at all, although the administration said it will reassess that decision in a year. Orphan and some specialty drugs will be exempt if they are from a trade deal country or “meet an urgent public health need.”

The sector will be largely spared major damage, according to Huynh. “This is a positive relative to investor sentiment and our prior expectations,” he wrote. “Smaller companies pursuing large indications may be most vulnerable, but overall we think given high margins, potential carve-outs, and time to adjust, the overall threat to the sector should be low.”

Those susceptible mid-sized companies have already begun lobbying to have the tariffs reversed through a coalition called the Mid-Sized Biotech Alliance of America. And the main industry lobbying group, Pharmaceutical Research and Manufacturers of America, has also opposed them, and lawsuits appear possible to at least temporarily disrupt their implementation.

“At a time when America’s global leadership in biopharmaceutical innovation is being challenged — and Americans are struggling to afford their insurance premiums — we need smart policies to ensure that the U.S. remains the best place in the world to discover and manufacture affordable, lifesaving medicines,” said Stephen Ubl, PhRMA’s president, in a statement at the time. “Tariffs will undermine this important goal.”

Huynh also noted that the exemption based on most-favored-nation pricing and manufacturing investment is set to sunset at the end of Trump’s current term, Jan. 20, 2029, which also leaves the potential for further harm to drugmakers.

“Companies are making 20-year [property, plant and equipment] investment decisions based on three-year policy certainty,” Huynh wrote. “If the next administration reverses course, $400 [billion] becomes stranded cost. Even if the exemptions are extended, there's no guarantee new concessions won't be demanded, creating a perpetual 2029 overhang.”

Novo Nordisk and Eli Lilly will sell their GLP-1 drugs for obesity and diabetes to some Medicare enrollees for $245 a month under an agreement hammered out with the Trump administration, the White House announced.

Through the deal, the two companies will also offer some of the same drugs through an online government portal for about $350 a month. Lilly and Novo were additionally required to sell starter doses of their coming oral obesity medicines for $149 a month. They’ll have to offer all their weight loss drugs to state Medicaid programs at “most favored nation” prices, too. Novo’s pill was approved in December and launched weeks later.

The figures represent discounts to the list prices of Wegovy and Zepbound, which are $1,350 and $1,080 a month, respectively, as well as the $499 monthly charge on Lilly and Novo’s direct-to-consumer sites. But comparisons are different when weighed against the “net” prices that follow negotiations with insurers.

The outgoing Biden administration in its waning days sought to extend Medicare and Medicaid coverage to Wegovy and Zepbound, but the Trump administration shelved that effort.

The deal announced with the Trump White House is more expansive, involving both a method of broadening access to obesity drugs and the administration’s push to equalize U.S. prices with those paid in other developed nations. The agreement even dipped into other parts of Lilly and Novo’s portfolio, with both agreeing to discounted prices for migraine and diabetes medicines that are sold through the new government website.

After speaking with Lilly executives, Leerink Partners analyst David Risinger wrote that the company believes the deal will make 40 million more Americans eligible for treatment with its obesity drugs. His team also estimates that the future $245 monthly price for Zepbound is about 55% of current Medicaid and Medicare net prices.

Still, the Medicare price for GLP-1 drugs will be offered through a pilot program that will cover most beneficiaries, Novo said. That may be necessary, as the law that authorized Medicare coverage of prescription drugs specifically bars weight loss products. But it also likely limits which Medicare beneficiaries will qualify, and could have a fixed expiration date. Those that do benefit will have a $50 monthly copay.

The agreement also won’t apply to the vast majority of people who receive their medications through commercial insurance. Risigner’s team estimates that the average U.S. commercial plan pays about $450 to $500 per month for Zepbound and that Lilly said it “does not have any obligations” to cut those prices. The company does expect them to “come down over time, but also expects significant volume upside,” Risinger wrote.

In agreeing to price cuts, Novo and Lilly have been spared from any tariffs on their drugs for three years, a benefit similarly handed to Pfizer and AstraZeneca following deals with the White House. In addition, the Food and Drug Administration awarded Wegovy and Lilly’s experimental obesity pill orforglipron “national priority” vouchers that could drastically shorten regulatory reviews.

Novo expects a negative “low single-digit impact” on global sales growth in 2026, when implementation of the new prices is expected. Lilly didn’t specify how its sales might be impacted.

Novo Nordisk is now offering its popular obesity drugs on Hims & Hers’ telehealth platform, ending a messy dispute that resulted in a lawsuit and a crackdown by U.S. drug regulators. 

Under a deal announced in March, Hims said it would provide access to Novo’s GLP-1 medicines — the diabetes drug Ozempic and the injectable and pill forms of the weight loss therapy Wegovy — to U.S. consumers at the same prices as other telehealth firms. Hims also agreed to no longer promote “compounded” versions of GLP-1 drugs on its website or in advertisements, and give existing patients the chance to switch to FDA-approved alternatives.

Novo, as a result, dismissed its patent infringement lawsuit against Hims while “reserving the right to refile in the future.” 

“This agreement with Hims & Hers is a meaningful win for patients in the United States,” said Novo CEO Mike Doustdar in a statement. “By expanding access through leading telehealth providers and digital care platforms, we are helping to connect more people with our FDA-approved medicines, which have been evaluated for safety and efficacy.”

The agreement represented an about-face for Hims, which had, been taking an adversarial stance against the makers of branded weight loss medicines. 

Hims is one of many telehealth firms that have used legal loopholes to capitalize on the demand for GLP-1 weight loss drugs. These firms started making lower-cost, compounded versions of Novo’s injectable Wegovy and Eli Lilly’s rival Zepbound when those medicines were in short supply. But despite lawsuits and warnings from the FDA, those efforts have continued even after the end of those shortages, as compounders have used methods of personalizing treatment regimens to try to comply with federal laws. 

Hims stepped up those plans in February, when it revealed plans to launch a compounded version of the pill form of Wegovy. The FDA approved Novo’s drug in December, making it the first pill of its kind available for obesity. And since then, early prescription totals suggest it’s gotten off to a very fast start. That progress is important for Novo, which has seen its market share eroded by compounders, pricing pressure and competition from Lilly. 

Hims attempted to quickly undercut Novo by selling a knockoff at a lower price. In doing so, Hims claimed that its copycat of oral semaglutide — the active ingredient in Wegovy — was formulated differently and involves a different delivery method to protect it during digestion. Some Wall Street analysts expressed skepticism about those claims, as Novo uses a specialized technology to ensure the effectiveness of its pill, which is a complex “peptide” drug instead of a standard small molecule. 

The move immediately spurred backlash from federal regulators and a lawsuit from Novo, prompting Hims to abandon the effort within days. It’s since completely changed course, calling the Novo deal “part of a new strategy” that’s based on providing U.S. customers with access to a “broad assortment” of FDA-approved counterparts. Compounded versions would only be offered if a clinician determines it’s “clinically necessary,” Hims said. 

Hims, for its part, said the decision is a result of industry progress in making branded GLP-1 medicines “available at more affordable prices,” which has upped demand. 

“We see tremendous growth opportunities in the U.S. with the expanding assortment of branded GLP-1 medications,” said co-founder and CEO Andrew Dudum in the company's statement.

The Trump administration in February unveiled a new online portal that, at the outset, allowed people to purchase around 40 drugs from a handful of manufacturers that have struck pricing deals with the White House.

Dubbed TrumpRx, the platform offers many medications already available through drugmakers’ own direct-to-consumer channels, such as Eli Lilly and Novo Nordisk’s obesity treatments Zepbound and Wegovy. Drugs from Pfizer, Merck & Co. and AstraZeneca, as well as an IVF treatment from EMD Serono, are also offered through the website. 

The products involved have all been featured in “most favored nation” pricing agreements meant to equalize U.S. drug costs with the lowest rate charged overseas. While the service could offer some financial relief to people who pay cash for drugs, it will have little effect on the vast majority of people whose medications are covered by health insurance.

Direct-to-consumer drug sales, which bypass traditional methods of paying for pharmaceuticals, represent a small but growing part of big drugmakers’ marketing strategies.

In the past, pharmaceutical companies used these channels as tools to compete with lower-cost generics. But they’ve become more prominent amid pressure from the Trump administration and, more recently, demand for obesity medications that are frequently excluded from private insurance plans. 

TrumpRx is the latest example. In its announcement, the Trump administration highlighted a dozen medicines that will be sold on the site, most of which are for common conditions like obesity, diabetes, asthma, eczema, infertility and osteoporosis. Aside from obesity drugs, Novo’s version of Wegovy for diabetes, called Ozempic, and AstraZeneca’s lung disease medicine Bevespi Aerosphere were the best-selling products included in the White House’s pricing deals. 

More drugs will be added to the site “in coming months,” the administration said.

Drug companies that cut deals with the White House gained a three-year reprieve from pharmaceutical tariffs in return. Notably, those agreements also largely include medicines that aren’t big earners, are already heavily rebated, or are nearing the end of their exclusivity. And the discounts offered, in many cases, don’t represent a better deal than securing drugs through insurance plans, premiums for which are spiking under the current administration. 

“TrumpRx is nothing more than a glorified coupon book, and it will advance the Republican agenda to undermine affordable health care for American families,” said Ron Wyden, D-Ore., in a statement. 

Since the Food and Drug Administration approved the first biosimilar 11 years ago, more than 80 biosimilars for various brand-name drugs have been given the go-ahead, reflecting a shift in regulatory and industry priorities.

Now, the agency is paving the way for more approvals, hoping the smoother road will introduce competition and lower prices for consumers. In March, the FDA issued draft guidance that, in some cases, would lower the bar for biosimilar testing, allowing companies to develop copycat versions of biologic medicines with reduced upfront R&D costs.

Biosimilars aren’t easy to make. Unlike small molecules, which can be recreated using a chemical recipe, biologics and biosimilars are developed with live organisms. Even if a brand-name biologic is well established, biosimilars need to be developed from the ground up and proven to be comparable — and at best interchangeable — with the original.

Comparative studies alone can take up to three years and cost $24 million, according to the FDA. But now, the agency plans to allow biosimilar makers to use data from a comparator product outside the U.S. Copycats have been more prominent in Europe, for example, where regulators have approved more than 130 biosimilars as of last year. This shift could cut development costs by about half, the agency said.

Biosimilars originally gained a pathway to approval as part of the Affordable Care Act in 2010, but their use has been uneven. With limited access to formularies and rampant patent barriers from brand-name drugmakers, the intended effects on prices have been limited.

But there’s also evidence that biosimilars can play a bigger role in the market moving forward if given continuing incentives from regulators.

A future in oncology

Because of a long, difficult and expensive R&D process, biologics come with a hefty price tag. Although they represented only about 5% of prescription volume in 2024, biologic medicines made up more than half of all drug spending in 2024, according to a recent report from health services company Cardinal Health.

Biologics have dominated in oncology since the arrival of “checkpoint inhibitors” in the middle of last decade. Those drugs are now used to treat dozens of cancers, in turn, have become big business for Big Pharma.

Merck & Co.’s cancer drug Keytruda remained one of the world’s bestselling drugs last year, raking in more than $35 billion.

Cancer drugs like Keytruda, as well as Bristol Myers Squibb’s Yervoy and Opdivo, and Genentech’s Perjeta, face exclusivity losses before 2030, opening the door to biosimilar competition. This wave could potentially result in major savings, Cardinal Health reported.

Oncologists have also been the most receptive to incoming biosimilars, with 99% of practices saying they are “confident in explaining biosimilars to patients,” according to Cardinal Health, which could drive demand and encourage patient switches.

Biosimilars of Roche’s Herceptin provide an early example of cost savings in cancer. Six copycats of the breast cancer drug have entered the market since 2019, resulting in an average sales price drop of 76%, Cardinal Health found.

Some price cuts, however, make for an unsustainable market for biosimilar makers. For example, when biosimilars of AbbVie’s bestselling immunology drug Humira entered the market in 2023, some launched at a 92% discount from the brand name’s wholesale acquisition cost, according to the Association for Accessible Medicines’ Biosimilars Council, creating difficult margins.

AbbVie’s legal practices presented another barrier for competitors. A “patent thicket” of hundreds of protections surrounding Humira kept biosimilars from the market for years until the pharma giant achieved settlements with the copycat makers for a 2023 launch. The biosimilars struggled at first before gaining traction about a year later.

While some biosimilars do cut costs for patients, the margins for companies that make them have become too thin. At the rate of $100 million to $300 million in upfront investment and years of clinical development, “fewer manufacturers will be able — or willing — to bring new biosimilars to market. This means the U.S. market could face diminished competition and higher long-term costs for patients,” according to the Biosimilars Council.

That’s where regulatory changes like the FDA’s revamped guidance could come into play. Big biosimilar makers like Amgen, Pfizer and Sandoz could reap the benefits of an easier route to market, potentially lowering prescription drug costs if the barriers to entry are reduced.

Eli Lilly in March expanded plans to improve access to its obesity shot Zepbound through an “employer connect” channel enabling people receiving workplace-provided health coverage to directly purchase the medication without going through their standard insurers.

More than 15 independent program administrators will initially run the program, which seeks to address the inconsistent coverage decisions private health insurers issue for Zepbound and other obesity medicines. Insurer pushback has become a significant access barrier for many people who might otherwise qualify for treatment.

“For far too many people living with obesity, starting or staying on treatment isn’t just a medical decision, it’s an access decision driven by coverage and cost,” said Ilya Yuffa, a Lilly executive vice president and head of its global customer capabilities, in a statement.

The program escalates efforts by Lilly and Novo to capture a bigger share of a lucrative market that’s still believed to be somewhat unaddressed. Since the resolution of drug shortages a couple years ago, both companies have launched online “cash-pay” services that allow people without insurance coverage or with prohibitively high cost-sharing requirements to buy their weight loss medicines more cheaply. 

These services have climbed in popularity amid pressure from the Trump administration to equalize U.S. prices with what’s paid in certain other developed countries. But they’ve also been looked to by Lilly, Novo and others with would-be weight loss medicines as an emerging area of future sales growth. 

“I think it’s going to be a big part of our future,” Lilly CEO David Ricks said at a conference in January.  

The new channel represents another unorthodox attempt at spurring more drug sales. With employer connect, Lilly is selling Zepound through a set of programs that will offer anywhere from low-cost benefits administration to comprehensive plans that offer wraparound obesity care services.

The goal in doing so is to enable employers to design individually tailored treatment plans, giving Lilly a new way for Lilly to compete with the telehealth providers selling compounded versions of Wegovy and Zepbound. Drug compounders used these kinds of approaches to win patients during GLP-1 drug shortages and grab share from Lilly and Novo.

Lilly set a price of $449 a month for all Zepbound doses, similar to the cost involved in some cash-pay channels, although patients’ actual out-of-pocket costs depend on employers’ benefit designs.

The federal government announced the next 15 medicines for which it will seek price reductions with the help of Medicare’s new negotiating power, including the breast cancer drugs Kisqali and Verzenio and the HIV treatment Biktarvy. Those cuts, which are allowed through the Inflation Reduction Act, will go into effect in 2028. 

Also included in the third annual round of price negotiations were the rheumatoid arthritis medicines Orencia, Cimzia and Xeljanz, as well as Botox when it’s used for therapeutic purposes like migraines. The Centers for Medicare and Medicaid Services designated these drugs for price negotiations under IRA provisions meant to limit expenditures on the drugs associated with the program’s highest costs. 

Combined, the 15 drugs account for $27 billion in Medicare spending and are used by some 1.8 million enrollees. Eli Lilly’s weekly GLP-1 shot for diabetes, Trulicity, is associated with $4.9 billion in annual costs, the highest of any medication on the list.

“CMS is taking strong action to target the most expensive drugs in Medicare, negotiate fair prices, and make sure the system works for patients — not special interests,” said CMS Administrator Mehmet Oz, in a statement. “This approach delivers real savings while strengthening accountability across the program.”

For the first time, these negotiations will include medicines covered by its “Part B” program that involves drugs administered in a physician’s office or other healthcare facility. Orencia, Cimzia and Botox are three examples. 

However, two key drugs that had been previously been expected to make this year’s list — the widely used cancer immunotherapies Keytruda and Opdivo — were left off. The inclusion of both was delayed by at least a year through provisions of the One Big Beautiful Bill Act, which changed the way the IRA program is applied to certain drugs.

The price cuts will, as a result, be “immaterial” for most of the companies whose drugs are on the list, according to Leerink Partners analyst David Risinger. The one exception is Biktarvy, which has Medicare revenue that could represent 8% of Gilead Sciences’ 2027 sales, Risinger wrote in a note to clients.

The exposure for all of the other companies involved comes to 3% or less of overall revenue, Risinger wrote.

Nonetheless, the industry group Pharmaceutical Research and Manufacturers of America railed against the announcement. The group argued that the IRA is “undermining future medical progress” by discouraging investment in new drugs, particularly the chemical, or “small molecule,” drugs that are subject to IRA price negotiations sooner than biologic medications.

“CMS is now planning to set prices for additional small molecule cancer treatments that would otherwise be spared without this penalty – driving even more investment away from these critical treatment options,” said Elizabeth Carpenter, the group’s executive vice president of policy and research, in a statement.

The first round of price negotiations, conducted in 2024, took effect this year.