
Pfizer CEO points to IRA as a factor that made Seagen an attractive target
One of the reasons Pfizer sought to purchase Seagen, as part of a $43 billion deal announced this morning, is that the Seattle-based biotech will be able to withstand the coming headwinds of the Inflation Reduction Act and the Medicare price negotiations that come with it.
Unlike some of his pharma CEO peers who have lambasted the new law, Pfizer CEO Albert Bourla told investors on a call this morning that there are two specific factors pertaining to the IRA that will actually help with the combo of Pfizer and Seagen moving forward:
- The $2,000 out-of-pocket cap for seniors, which takes effect in 2025 and will mean that more of those on Medicare will be able to access expensive cancer drugs like those developed by Seagen. All four of Seagen’s currently marketed products have list prices of more than $100,000 per year.
- All but one of Seagen’s currently marketed drugs are biologics, which means longer exclusivity than small molecule drugs (13 years vs. nine years) under the IRA, prior to the government beginning its negotiations.
The Congressional Budget Office similarly noted in a slide deck from February on the IRA’s impacts that Medicare Part D enrollees “will use more drugs because their out-of-pocket costs will be lower.”
Bourla also noted that antibody-drug conjugates like those developed by Seagen aren’t likely to see the same levels of biosimilar competition that are currently seen with the monoclonal antibodies or other biologics.
Later in the call, Bourla took another question on the IRA, saying, “It is what it is. This is something that is on the easier part. I don’t underestimate the impact that the IRA will have on the amount of prescriptions and the ability of patients to pay.”
The Pfizer CEO’s comments run in contrast to the way some of his peers have pointed to the IRA as a reason and/or scapegoat for biopharma pipeline trims. Several companies, like Alnylam and Eli Lilly, have already pointed to the new law as a major factor in decisions to cut development programs.
For more on what else needs to be ironed out in the IRA before some of the more central elements take effect, check out a recent panel Endpoints News held on the topic.
Editor’s note: This article has been corrected to note that not all of Seagen’s marketed drugs are large molecule biologics as Tukysa (tucatinib) is a small molecule pill.