Pharma Giants Unfazed by Medicare Price Negotiations

Four major pharmaceutical companies involved in the first U.S. Medicare price negotiations do not foresee significant business impacts from the proposed drug prices set to take effect in 2026. Executives from Bristol Myers Squibb, Johnson & Johnson, AbbVie, and AstraZeneca expressed confidence despite initial concerns about government price setting.

Four pharmaceutical companies involved in the first U.S. negotiations over Medicare drug prices anticipate no significant impact on their businesses, having reviewed confidential government price suggestions that will take effect in 2026.

Top executives from Bristol Myers Squibb, Johnson & Johnson, AbbVie, and AstraZeneca, whose drugs are among the initial 10 selected for negotiations, shared their perspectives in quarterly conference calls. The U.S. Medicare program, covering 66 million elderly and disabled individuals, spends billions annually on medications and plans to cut list prices by at least 25% starting September 1, 2026.

UBS analyst Trung Huynh noted that while drugmakers feared substantial price reductions, their comments indicate these cuts are manageable and align with expectations. The Inflation Reduction Act mandates these negotiations, targeting the 100 most expensive drugs. Despite concerns about innovation stifling, companies like Bristol Myers show confidence in navigating these reductions.

(With inputs from agencies.)