Editors' (re)View: Bayer faces financial woes; IRA's impact on the pharma ecosystem
Bayer faces financial woes
Earlier this week, Bayer outlined restructuring measures, particularly in Germany, expected to result in significant staff reductions.
The decentralized job cuts, which should be completed by the end of 2025, will primarily affect managerial and coordination roles, impacting approximately 22,200 employees in Germany. Bayer is offering staggered severance agreements, reflection periods of up to six months, and support for external placement for the job cuts in Germany.
But the company’s financial woes do not come as a surprise. Last November, Bayer witnessed a 16.4% decline in its shares, marking the largest drop in over three years.
This followed the termination of a major late-stage trial for an anti-clotting drug, asundexian, due to insufficient efficacy. The experimental anticoagulant failed to match Bristol-Myers Squibb and Pfizer's Eliquis in preventing strokes among high-risk patients.
The trial halt added to Bayer's existing challenges, including a recent bill of $10.9 billion — the largest settlement ever paid by a pharma company then — to end the lawsuits claiming that Monsanto’s Roundup, the world’s most popular weedkiller, is linked to cancer.
This development cast doubt on a project intended to replace revenue from the expiring patent of the blood thinner Xarelto. The news came as Bayer's new CEO, Bill Anderson, grappled with restructuring options amidst the weakened share price.
As reported by Reuters, a few weeks later, Anderson shared in an analyst call the possibility of a potential sale of the consumer products unit.
While the recent restructuring savings haven't been announced, the company has a history of bouncing back, even from selling heroin as a cough supressant. — Andrea Corona
Will expanding the IRA crush the pharma ecosystem?
Health care economics consultancy Vital Transformation recently unveiled the results of a study that modeled the impact of the drug pricing provisions of the Inflation Reduction Act, if the expansions proposed by some House Democrats were to pass.
The Lowering Drug Costs for American Families Act (H.R. 4895) would impose government price-setting for up to 50 selected Medicare drugs starting in 2029 and provide those same lower negotiated prices to all Americans who are covered by private health plans.
The Vital Transformation study came up with some startling estimates, including:
- Loss of 136,000–216,000 direct biopharma industry jobs and 678,000–1,076,000 indirect jobs across the U.S. economy
- Roughly 134 fewer FDA approvals of new medicines treating primarily the Medicare-aged population over a ten-year period, especially treatments for cancer, brain and spinal cord conditions, and rare and infectious diseases
In addition, the study estimates that had the drug pricing provisions of H.R. 4895 been in place prior to the development of today’s top-selling medicines, 76 of the 198 therapies that would be selected for Medicare price setting would likely have not been developed.
While it's important to keep in mind these are estimates based on modeling, nevertheless, the numbers are disconcerting. It certainly seems that the Inflation Reduction Act, which has already caused considerable backlash within the pharma industry, is going to take center stage as we enter into the election year.
The debate is an important one to have, as the U.S. seeks to find the right balance between making lifesaving drugs affordable and continuing to incentivize innovation. —Karen Langhauser
