The biopharma industry is kicking off the year with price hikes and some early signs of a sustained uptick in mergers and acquisitions (M&A). Prices of more than 350 drugs will be increased in January alone, helping to partially offset an ongoing spate of inflation that could potentially threaten pharmaceutical profit margins.
Though M&A began to pick up in the second half of last year, many drugmakers are still maintaining significant cash balances that they’ve yet to deploy. Moderna, for instance, just announced their first acquisition ever. Coming patent cliffs and favorable valuations of biotech firms generated a potent mix for several blockbuster deals in 2022 and its likely that trend continues to gain steam in 2023.
Related ETF: VanEck Pharmaceutical ETF (PPH)
Pharma giants including Pfizer Inc., GlaxoSmithKline PLC, Bristol Myers Squibb, AstraZeneca PLC, and Sanofi SA are raising their US prices on more than 350 unique drugs this month, according to data analyzed by healthcare research firm 3 Axis Advisors. Per 46brooklyn data, cited by Reuters, that follows a wave of price hikes on more than 1,400 drugs in 2022, the most increases in a single year since 2015.
Drugmakers hiked list prices by an average of 5%, while the median price of newly FDA approved drugs in 2022 rose 23.3% YoY, jumping from $180,000 in 2021 to $222,003.
Rising drug prices will partly offset inflationary pressures and play a role in supporting the biopharma industry’s profitability, as well as a burgeoning wave of M&A that kicked off in the latter half of 2022. MRP has covered several key deals announced by Pfizer, Eli Lilly, and others. Just last month, Amgen agreed to the year’s largest acquisition, acquiring Horizon Therapeutics for $27.8 billion and closing out the year on a high note.
2023 kicked off with vaccine superstar Moderna making their first acquisition ever, purchasing Japan’s OriCiro Genomics and describing the company’s tools as “best in class” for the synthesis of…
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