After drug pricing concerns weighed on Gilead Sciences’ stock toward the end of December, the drugmaker has kicked off 2015 the same way it did the previous two years: by increasing prices on several products.
The biotech giant raised the prices of seven of its major products by as much as 9.9 percent on Jan. 1, according to research from Cowen, which suggested investor concerns over the drugmaker’s pricing power “have been overblown.”
Prices were raised for products including HIV drugs Viread and Atripla, as well as new leukemia drug Zydelig, Cowen’s Phil Nadeau wrote in a research report Monday.
They don’t include blockbuster hepatitis C drugs Sovaldi and Harvoni, which have been the targets of ire over drug prices—and concern among investors that more pressure would follow after Express Scripts made a deal with competitor AbbVie to offer its hepatitis C drug exclusively on its largest formulary plan. That move sent Gilead’s stock into a tailspin.
“We see few signs that the biopharmaceutical industry’s pricing power is diminished,” Nadeau wrote.
He pointed out other drugmakers also took increases on Jan. 1, including Biogen Idec and Teva on their multiple sclerosis therapies, Tysabri and Copaxone, United Therapeutics on its pulmonary arterial hypertension drug, Tyvaso, and Acorda Therapeutics on its pain patch, Qutenza.
The deal between AbbVie and Express Scripts, the largest pharmacy benefits manager in the U.S., struck stock prices across the biotech industry, as investors feared similar pressure would come to bear in other therapeutic areas with multiple drugs competing.
“With price increases coming in competitive markets such as HIV, multiple sclerosis, CLL, and pulmonary hypertension, there is little to suggest that biopharmaceutical companies have begun to regularly compete on price in crowded or mature markets, in our opinion,” Nadeau wrote. “Therefore, we continue to expect pricing will remain a driver of top- and bottom-line growth for Gilead specifically, and the biopharmaceutical industry more generally, for the foreseeable future.”