Trump bad for drugmakers? Novartis thinks otherwise
Reuters reported yesterday that Swiss drugmaker Novartis is considering investment into the U.S. despite the president-elect’s recent tirade against high prices in the industry. Last week, the incoming commander in chief caused a panic in the healthcare sector by claiming that they were “getting away with murder,” and vowed to introduce more competition to push prices down.
Novartis CEO, Joe Jimenez, told Reuters on Wednesday: “When we build a new manufacturing site we think about the tax rate, we think about the economy of the country, we think about jobs, so a booming U.S. economy would make the U.S. more attractive for investment.”
Novartis is experimenting with new pricing methods to combat the expected continued pressure on prices in the U.S. According to Jimenez, “outcomes-based pricing” should let it adapt suitably well.
The company’s new heart drug, Entresto, for example, is now being offered through two insurers on a deal which will see payment calculated based on “any proven reduction in patient admissions to hospital, not on the number of pills consumed.”
Entresto, Jimenez added, has seen a “nice pick up in prescriptions,” recently, after a slower start than Novartis would have liked.
Entresto isn’t the company’s only exciting new product though, and Novartis has a small handful of heart and eye conditions drugs on the way to market which, hopefully, will pick up the slack caused by generic competition to its blood cancer drug Glivec.
According to Jimenez: “We have a number of catalysts that are coming. From the end of 2017 we will be completely out from under that genericisation and the company should enter its next growth phase beginning in 2018.”
Dominion holds Novartis in its Global Trends Managed Fund.
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