Bristol Myers CEO already reassessing portfolio in wake of US pricing law: report

Big Pharma CEOs haven’t been shy in expressing their concerns with Biden’s Inflation Reduction Act (IRA), with the latest broadside coming from Giovanni Caforio. The Bristol Myers Squibb chief took to the pages of the U.K.’s Financial Times over the weekend to warn that the company expects to halt funding to certain drugs as a result of the government’s drug pricing legislation.

“I do expect that we will cancel some programs, whether that is, you know, a full-on indication for an existing medicine or a new medicine. We are undergoing a review of our portfolio now,” Caforio is reported to have told the newspaper in an interview published Sunday.

A spokesperson for the company confirmed with Fierce Biotech this morning that the portfolio review is happening. "We are awaiting regulatory guidance and clarification from the Centers for Medicare & Medicaid Services to complete our review of our portfolio’s impact," they said via email.

There may be a while to go yet, with Caforio reported as saying that the company has yet to identify a specific candidate that would actually be culled. However, the CEO is quoted as saying that the nature of the bill means oncology will be the worst affected therapy area.

When asked by Fierce Biotech which therapy areas are most likely to be affected, the spokesperson reiterated that the company "is concerned about the impact government price setting will have on investment in clinical research, especially in areas like oncology that require significant investment following initial FDA approval."

It's worth noting that pharmaceutical companies routinely assess their portfolios and often dump candidates during their quarterly reporting periods. While several companies have already flagged concerns with the IRA, it's not immediately clear how changes to pricing rules would affect these decisions. Even ahead of these recent proclamations from drug company CEOs, pharma industry watchers warned that drugmakers would attempt to blame their R&D setbacks on the law.

The IRA, which became law in August, gives Medicare the power to slash drug prices and cap out-of-pocket spending for seniors. It also requires drugmakers to pay a Medicare rebate if their prices rise faster than the rate of inflation.

In his Financial Times interview, Caforio echoed gripes made by leaders across pharma and biotech—namely that the legislation makes it harder for companies to justify continuing to invest in developing new indications for existing drugs and is likely to shrink the number of new medicines companies take into the clinic.

Caforio is only the latest Big Pharma voice to keep up the heat on what the sector claims will be a negative impact from the drug pricing legislation. A common argument made by the industry is that the IRA doesn't provide for back-and-forth "negotiations." Instead, since the bill authorizes harsh financial punishments against companies for not complying with Medicare's pricing offers, industry advocates say the bill introduces "price controls."

Pharmaceutical Research and Manufacturers of America (PhRMA) told Fierce Pharma in the days before the bill became law that the trade group was still weighing ways to counter the legislation.

“We will explore every opportunity—including legislative, regulatory and legal—to make sure patients have access to the medicines they need and our industry can continue to develop lifesaving cures and treatments,” PhRMA spokesperson Sarah Sutton said at the time.