Bristol Myers Squibb to Discontinue Certain Drug Development Programs Amid U.S. Drug Pricing Reforms

According to the Zhitong Finance APP, Giovanni Caforio, CEO of Bristol-Myers Squibb (BMY.US), stated that the recent drug pricing reforms introduced in the United States will force the company to cancel some drug development projects.

The Inflation Reduction Act (IRA), passed in August this year, allows the U.S. Secretary of Health and Human Services to negotiate prices for Medicare Part B and Part D drugs for the first time, among other measures.

Caforio stated, "I do expect that we will discontinue some programs, whether they are full indications for existing or new drugs. We are currently reviewing our portfolio," and added that some measures of the IRA will severely impact the development of anti-cancer drugs. "The biggest impact of the IRA is actually in the field of oncology. It's used for cancer treatment."

He pointed out that the company has not yet determined any specific candidate drugs to be shelved.

However, Caforio stated that Bristol-Myers Squibb is in a strong position because the company's robust pipeline of new drugs will not face pricing scrutiny for many years.

He added that the reform allowing the government to "set prices" for certain drugs, rather than engage in genuine negotiations, would make the case for investing in expanding existing treatments to fit new indications more challenging.

"The time we can get a return on our investment has been arbitrarily shortened. Like all peer companies, we are concerned about this because it will affect the number of new drugs developed and also the way new drugs are developed."

Last October, RNAi therapeutics company Alnylam Pharmaceuticals (ALNY.US) also ended a Phase III trial aimed at finding a treatment for the rare eye disease Stargardt, citing the impact of U.S. drug pricing reforms.