First-quarter results for drugmakers suggest that companies have less leverage to set high prices for their products, Bloomberg reported Thursday.
"We do have a payer environment that's been consolidating, and with that consolidation, there's better negotiating power against pharmaceutical firms on price," stated Morningstar analyst Damien Conover.
The shift came after EpiPen manufacturer Mylan and Valeant Pharmaceuticals faced scrutiny in the US regarding their pricing practices.
Several drugmakers, including AstraZeneca, Eli Lilly Johnson & Johnson and Merck & Co., reported slowing or disappointing drug sales for the first quarter.
Additionally, Amgen has been among the companies affected by the growing influence of pharmacy benefit managers, which restricted the drugmaker's ability to raise the price of Enbrel and limited coverage of Repatha to the sickest patients.
Meanwhile, although companies including AbbVie, Bristol-Myers Squibb and Eli Lilly have used sales volumes to fuel growth, Credit Suisse analyst Vamil Divan questioned whether it was sustainable, noting that price increases were responsible for all of the pharmaceutical industry's earnings growth last year.
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