Despite the pharmaceutical industry’s heavy criticism of the Inflation Reduction Act, Johnson & Johnson, Pfizer and Bristol Myers Squibb recently downplayed the legislation’s overall impact on business in first-quarter earnings calls.
All three companies voiced early opposition to the IRA, likening Medicare negotiations to price setting and arguing that the law is a threat to innovation. J&J’s executive VP Jennifer Taubert reinforced that stance in an April call with investors. But she also noted that J&J’s products currently under negotiation — Xarelto, Stelara and Imbruvica — “are not our growth drivers for the future.”
“Irrespective of the IRA, when I take a look at our growth drivers and how our pipeline is coming in, we feel real confident about the state of our business,” Taubert said, according to an AlphaSense transcript.
J&J, Bristol Myers and Pfizer did not comment on the ongoing negotiation process. While several lawsuits have been filed to stop negotiations before they take effect in 2026, four have been rejected in federal court, including two this week brought by J&J and Bristol Myers. Both companies have filed appeals.
Bristol Myers CEO Chris Boerner told investors last week that the full effect of negotiations for its Pfizer-partnered blood thinner Eliquis is still unknown.
“While IRA has an impact in the middle of the decade, we feel very good about being able to more than compensate for that with a very young and attractive growth profile coming from our growth portfolio and the pipeline,” he said.
A Bristol Myers spokesperson told Endpoints News on Thursday that the company hasn’t softened its tone.
“BMS is disappointed with the court’s decision and has appealed. We maintain our concerns that the IRA’s so-called ‘negotiation’ program is in violation of the U.S. Constitution and will have a serious impact on future innovation for patients. BMS will continue to work with CMS on implementation as required by the law,” the spokesperson said.
Pfizer’s CEO Albert Bourla — who once called the IRA process “negotiation with a gun to your head” — told investors Wednesday that he continues to be “very concerned for the industry as a whole with the mandatory cost reduction.” But he also noted a silver lining.
“One good thing for us, is, first of all, that we have good exposure on vaccines,” he said. “They are benefiting from the IRA because there is no cost-sharing. So we can see that in the volumes again.”
Pfizer CFO David Denton told investors at the TD Cowen Health Care Conference in March that the IRA’s impact over time is expected to be modest, as “many of those products that are at risk in the near term are products that are losing exclusivity within a few years.”
Bourla added on Wednesday, “This doesn’t mean that this is not very bad for the industry and for innovation, and we [are] clearly opposing and will try whatever we can to defend it.”
Other companies have warned that the full effects of the IRA remain unknown so far. CMS has said that by March 1, 2025, it will publish explanations of the maximum fair prices that have been negotiated for drugs selected for 2026.
Editor’s Note: This story has been updated to include comment from Bristol Myers Squibb.