In late 2010,Amgen, the worlds largest biotech companyprojected revenues of $15.1 billion for theyear and exceeded analysts forecasts. Amgen’s star pharmaceutical, Enbrel prescribed to treat thesymptoms of rheumatoid arthritis, increased in sales by 3 percent to $939 million. The sales wereenhanced by a nearly 5 percent price increase. In the second quarter of 2011, profits from Enbrelrose 9 percent on the wings of price increases. With America in economic recession and record highunemployment sparking rallies in the streets, new research from October 2011 reveals thatemployment in the biotech industry rose by an incredible 632 percent in the past five years in thestate of California alone, including Amgen.Barclays Capitalrecently crunched the numbers for 130 top selling pharmaceutical drugs as indicatedby sales. Brand name prescriptions have increased in price as much as 29 percent since 2010. Plavixhas increased over 13 percent. In early 2010, Benicar, was one of the most affordable medicationsused to treat high blood pressure in its class. Within the year, a monthly supply of 20 milligram tabletstopped out at $88.80, a 29 percent price increase.
Seniors may only see a small amount of savings until 2020
Seniors will see subsidies in the coverage gap for brand-name drugs beginning in 2013 of only 2.5percent. At that point, the cost sharing will break down to 47.5 percent paid by the senior and 2.5percent paid by the government plans, with the remaining 50 percent covered by a manufacturer discount. For generic drugs, the plan will reduce seniors’ out-of-pocket costs by 7 percent each year and inversely increase the amount paid by Medicare Part D by 7 percent each year.Over the next 8 years, the out-of-pocket cost for prescriptions will slowly reduce until finally, in 2020,seniors enrolled in Medicare Part D will have 75 percent of their prescription costs covered.
Source: Barclays Capital