Novartis CEO Vas Narasimhan, MD, said the effects of President Donald Trump’s most favored nation drug pricing policy will become more pronounced over the next 18 months, according to an April 28 report from CNBC.
The policy, which ties U.S. drug prices to those in other wealthy countries, presents a “very difficult situation” for drugmakers and could delay access to new medicines in Europe and Japan if those governments do not adjust pricing frameworks, Dr. Narasimhan said.
The policy currently affects 5% to 10% of Novartis’ sales in the Medicaid segment.
Novartis reported first-quarter sales of $13.1 billion, below the $13.5 billion expected by analysts and reflecting a 1% decline year over year. Sales fell 5% on a constant currency basis and earnings per share were $1.65, down 10%, CNBC reported.
The decline was driven in part by generic competition, including a 42% drop in sales of heart drug Entresto after its U.S. patent expired, as well as declines of 7% to 17% for other key products.
Dr. Narasimhan’s comments come as the Trump administration has struck pricing agreements with multiple drugmakers under the most-favored-nation model, including a recent deal with Regeneron that ties U.S. prices to international benchmarks and includes commitments around Medicaid pricing and direct-to-consumer distribution.
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