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Bayer to get $13m trim in PBS cuts
Posted 9 November 2017
Price cuts to formulary one drugs due to take effect in April will wipe a further $24.4 million off the PBS which is already shrinking, exclusive analysis has found.
Pharma in Focus identified 23 products PBS listed between April 2012 and March 2013 which will be impacted by the five per cent price cut on F1 drugs that occurs five years after listing.
Ten of the 23 products impacted earned more than $1 million in pre-rebate R/PBS benefits in the year to September 2017, with the top 10 having a combined pre-rebate income of $486 million.
Hardest hit will be Bayer's wet age-related macular degeneration blockbuster Eylea (aflibercept), which earned $256.56 million in pre-rebate benefits in the 12 month period.
As Bayer's highest earning drug, Eylea accounts for almost 60 per cent of the pharmaco's pre-rebate PBS earnings and the price cut will wipe $13 million - almost three per cent - from Bayer's pre-rebate income.
By far the biggest PBS earner to be impacted by the April F1 cuts, Eylea will wear more than half the total $24.4 million in cuts.
The next biggest earners on the April cuts list are Roche's ovarian cancer biologic Avastin (bevacizumab), listed in September 2012, and Janssen's multiple myeloma drug Velcade (bortezomib), listed in October 2012.
Avastin earned $67.3 million in pre-rebate R/PBS earnings in the year to September while Velcade earned $61.2 million. Each of these drugs stands to lose more than $3 million in annual pre-rebate PBS income and combined they will absorb 26 per cent of the April cuts.
Also impacted will be AstraZeneca's cardio drug Brilinta (ticagrelor), now listed on the PBS for over five years. Its $27.4 million in annual pre-rebate PBS earnings will be cut by $1.4 million.
For the PBS' highest earning company, follow on cuts to Gilead's HIV combination drug Eviplera (tenofovir/emtricitabine/rilpivirine) are likely to have little impact as it contributes only $19.6 million to the company's PBS earnings.
Likewise, Novartis' soft tissue sarcoma drug Votrient (pazopanib) with $19 million in pre-rebate annual income will drop less than $1 million - a small proportion of the company's overall PBS income.
Rounding out the top 10 drugs impacted by the April 2018 F1 cuts are Sanofi's prostate cancer treatment Jevtana (cabazitaxel), Ferring's reproductive drug Menopur (human menopausal gonadotrophin), Phebra's leukaemia drug Phenasen (arsenic) and Lilly's pulmonary arterial hypertension drug Adcirca (tadalafil), each earning $16.3 million, $14.8 million, $2.9 million and $1 million respectively in pre-rebate income for the past year and due to lose five per cent in April.
While the $24.4 million in lost pre-rebate income amounts to only a quarter of one per cent of total PBS revenue, for the PBS it will continue to contribute to income shrinkage. For Bayer, it is likely to have a larger impact.
Megan Brodie
megan.brodie@lushmedia.com.au
Analytics for this story are based on PBS date-of-processing data as supplied by the Department of Human Services and generated using MiPortal, Mercurial's cloud-based business intelligence & analytics platform. Click here for a free trial or contact Regan McCracken on 02 8459 5244.
Posted 9 November 2017
Price cuts to formulary one drugs due to take effect in April will wipe a further $24.4 million off the PBS which is already shrinking, exclusive analysis has found.
Pharma in Focus identified 23 products PBS listed between April 2012 and March 2013 which will be impacted by the five per cent price cut on F1 drugs that occurs five years after listing.
Ten of the 23 products impacted earned more than $1 million in pre-rebate R/PBS benefits in the year to September 2017, with the top 10 having a combined pre-rebate income of $486 million.
Hardest hit will be Bayer's wet age-related macular degeneration blockbuster Eylea (aflibercept), which earned $256.56 million in pre-rebate benefits in the 12 month period.
As Bayer's highest earning drug, Eylea accounts for almost 60 per cent of the pharmaco's pre-rebate PBS earnings and the price cut will wipe $13 million - almost three per cent - from Bayer's pre-rebate income.
By far the biggest PBS earner to be impacted by the April F1 cuts, Eylea will wear more than half the total $24.4 million in cuts.
The next biggest earners on the April cuts list are Roche's ovarian cancer biologic Avastin (bevacizumab), listed in September 2012, and Janssen's multiple myeloma drug Velcade (bortezomib), listed in October 2012.
Avastin earned $67.3 million in pre-rebate R/PBS earnings in the year to September while Velcade earned $61.2 million. Each of these drugs stands to lose more than $3 million in annual pre-rebate PBS income and combined they will absorb 26 per cent of the April cuts.
Also impacted will be AstraZeneca's cardio drug Brilinta (ticagrelor), now listed on the PBS for over five years. Its $27.4 million in annual pre-rebate PBS earnings will be cut by $1.4 million.
For the PBS' highest earning company, follow on cuts to Gilead's HIV combination drug Eviplera (tenofovir/emtricitabine/rilpivirine) are likely to have little impact as it contributes only $19.6 million to the company's PBS earnings.
Likewise, Novartis' soft tissue sarcoma drug Votrient (pazopanib) with $19 million in pre-rebate annual income will drop less than $1 million - a small proportion of the company's overall PBS income.
Rounding out the top 10 drugs impacted by the April 2018 F1 cuts are Sanofi's prostate cancer treatment Jevtana (cabazitaxel), Ferring's reproductive drug Menopur (human menopausal gonadotrophin), Phebra's leukaemia drug Phenasen (arsenic) and Lilly's pulmonary arterial hypertension drug Adcirca (tadalafil), each earning $16.3 million, $14.8 million, $2.9 million and $1 million respectively in pre-rebate income for the past year and due to lose five per cent in April.
While the $24.4 million in lost pre-rebate income amounts to only a quarter of one per cent of total PBS revenue, for the PBS it will continue to contribute to income shrinkage. For Bayer, it is likely to have a larger impact.
Megan Brodie
megan.brodie@lushmedia.com.au
Analytics for this story are based on PBS date-of-processing data as supplied by the Department of Human Services and generated using MiPortal, Mercurial's cloud-based business intelligence & analytics platform. Click here for a free trial or contact Regan McCracken on 02 8459 5244.
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