AstraZeneca has concluded its price negotiations with the IRA for its blockbuster drug Farxiga, in the latest update for pharma companies undergoing the process.
Ruud DobberRuud Dobber, AstraZeneca’s biopharma business unit head, reiterated that the price impact on Farxiga “will be very limited” considering that the new price would come into effect in January 2026 and its loss of exclusivity for the drug is only a few months later in April. It’s unclear whether AstraZeneca has accepted the federal government’s final offer.
“All in all, it was a very useful exercise for us as a company and there are a lot of learnings,” Dobber said during a call with the media Thursday morning. Previously, CEO Pascal Soriot said the negotiations that started in February were “really encouraging” in context with what the industry was expecting.
Despite the “limited impact” comments on Thursday, the UK company appealed its federal court loss to overturn parts of the Inflation Reduction Act’s drug price negotiations. AstraZeneca argued that CMS’ latest guidance contradicts the law.
“AstraZeneca cannot fairly value its product without a judicial determination of whether the guidance is unlawful,” the company said.
According to CMS guidance, the government had a July 15 deadline to submit a final offer, but manufacturers have until the end of the month to respond. The new, negotiated prices are set to be announced on Sept. 1.
Johnson & Johnson said last week it had received final price offers, but it was unclear then if it had accepted the deal. Both companies, alongside Bristol Myers Squibb, have downplayed the impact of the Medicare price negotiations on sales.
Farxiga, which is approved in type 2 diabetes, heart failure and chronic kidney disease, generated $3.8 billion in sales in the first half of the year. The drug has a list price of $582.25 for a 30-day supply.
Development decisions
When asked how the IRA will impact AstraZeneca’s development decisions, Soriot said on a Thursday investor call that “we are shifting a little bit away from small molecules.”
Under CMS’ current guidelines, small molecules qualify for potential negotiations seven years after approval, while biologics become eligible after 11 years.
“It doesn’t mean we’re not going to be in small molecules. We will be,” Soriot said. However, he noted that the law may impact AstraZeneca’s regulatory strategy in the US.
“If you think of a product that has a small indication to start with, we will develop the smaller indications, we will launch them around the world. But in the US, we will have to wait before we file. Because we can’t start the clock for a small indication where we would record low sales for a couple of years,” he said.
Editor’s note: This article was updated to add further context and comments from the company’s call with investors.