Stock Spotlight: US drug price negotiation not an immediate threat to Pfizer

investmentweek.co.uk:

The company reported earlier this year that the Covid-19 vaccine was expected to bring in sales of around $13.5bn in 2023, a decline of almost 70% from 2022.

Through using the government to negotiate for the price of common pharmaceuticals on Medicare, Biden pledged to bring costs down for pensioners, with the first ten drugs eligible announced last week.

Pfizer's blood thinner drug Eliquis was included on the list, which Sheena Berry, equity research analyst at Quilter Cheviot, said brought in revenues of $6.5bn for the firm last year.

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Ismail Rashid, equity analyst at Charles Stanley, explained that although Pfizer had exposure to drugs included in Medicare, he noted the programme would not be implemented until 2028, softening the immediate impact on the firm.

Damien Conover, director of healthcare equity strategy at Morningstar, said its forecast for the company was still optimistic: «We view the outlook for Pfizer as fairly steady growth over the next couple years, excluding the expected Covid-19 sales declines.»

Since the Covid-19 pandemic has tapered off, Pfizer has found itself lost amid a changing strategy, suffering major year-on-year losses versus its pandemic peak.

Richard Hunter, head of markets at interactive investor, described the firm as a «victim of its own Covid success», peaking at a $60 share price in December 2021, according to data from ii, before falling to $35.78 today (4 September), with a 30% drop this year alone.

«At the height of the pandemic, the company became the first pharmaceutical group to achieve $100bn of sales, driven largely by the success of its Covid-19 vaccine,» said Hunter.

Rashid added the vaccine had «missed sales