Medicare Will Soon Negotiate Some Drug Prices. Is This a Threat to Johnson & Johnson's Earnings?
The Centers for Medicare and Medicaid Services may be paying much less for some of the world's most commonly prescribed drugs in the coming years. That's because Medicare is about to start negotiating some of the prices it pays directly with pharmaceutical companies, based on a new legal framework that was instituted as part of President Joe Biden's Inflation Reduction Act.
This week, the Biden administration announced the names of the 10 drugs that are first up on the negotiations list. And three of them belong to Johnson Johnson (NYSE: JNJ). In fact, one is its best-selling product, immunology drug Stelara.
Stelara brought in more than $9.7 billion last year for Johnson Johnson. Its other two drugs on the list -- cancer treatment Imbruvica and blood thinner Xarelto -- each generate more than $2 billion annually. So, should we consider the price negotiations as a threat to its biggest revenue sources?
Source Fool.com
