瑞信-全球-制药业-全球制药业：正在审查的美国药品回扣的未来-2019.4.29-54页.pdf

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.29 April 2019GlobalEquity ResearchPharmaceuticals&Biotechnology Global Pharmaceuticals CONNECTIONS SERIESThe Credit Suisse Connections Series leverages our exceptional breadth of macro and micro research to deliver incisive cross-sector and cross-border thematic insights for our clients.Research AnalystsEuropean Pharma Team44 207 888 0304creditsuisse.pharmateamcredit-Martin Auster,M.D.212 325 6573martin.austercredit-Vamil Divan,MD212 538 5394vamil.divancredit-Trung Huynh44 20 7888 2102trung.huynhcredit-Gretel Janu61 2 8205 4028gretel.janucredit-Dominic Lunn44 20 7883 0471dominic.lunncredit-Fumiyoshi Sakai81 3 4550 9737fumiyoshi.sakaicredit-Jo Walton44 20 7888 0304jo.waltoncredit-Matthew Weston PhD44 20 7888 3690matthew.westoncredit-Future of US drug rebates under review In this Connections Series report,we quantify the relative exposure of our Global Pharma universe to proposed US healthcare reforms.Against this,we look at the level of portfolio uniquenessa key defence against price pressure.With the prospect of current rebate walls falling for Medicare(30%of the US market),we identify companies that could benefit from increased utilisation due to lower patient copays,as well as those that could face increased competition.Support from many Pharma CEOs for rebate reform suggests the companies also expect to benefit.However,we do expect plan sponsors to fight back with intensified price pressure and increased utilisation management to limit premium increases.US net drug price rises may have been only+2ppt in 2018,but we believe this still drove c.33%of Global Pharma industry net income growth.We see continued strong political pressure to reduce absolute drug prices,with lower prices likely to be an integral part of President Trumps promises made,promises kept mantra.The topic is clearly also a priority for the Democrats,given various presidential candidates Medicare for all proposals.We identify companies most at risk of changes in protected classes and international reference pricing.These go beyond what we expect could be enacted ahead of the next election but show exposure that is likely to remain topical as healthcare remains in the political spotlight.Relative winners in our analysis include AZN,Roche and Novo,while we expect a more negative impact on BMY,JNJ and AbbVie.We upgrade Novo Nordisk to Outperform(from Neutral)in a separate report.We view Novo as best positioned among Global Pharma to see increased utilisation from lower patient copays.Figure 1:CS scoring of overall exposure to US rebates-1.5-1.0-0.50.00.51.01.52.0Exposure to US ReformsUniquness:CurrentUniqueness:Expected changeRebate Wall:Inc.CompetitionRebate Wall:Higher UtlisationProtected CatInt Ref PricingOverall ScoreSource:Company data,Credit Suisse estimates29 April 2019Global Pharmaceuticals2Key chartsFigure 2:US net prices contributed 35%of 2018 net income growthFigure 3:Rebates are still tied to levels of uniqueness-15%-10%-5%0%5%10%15%2012201320142015201620172018%change in universe net income from US price and other factors($)Contribution from net US price%Growth OtherABBVALXNAMGNBIIBBMYBMRNCELGLLYGILDINCYJNJMRKPFETEVA.NVRTXAZN.LGSK.LLUN.CONOVN.SNOVOb.COROG.SSASY.PAUCB.BRBAYGn.DEGRLS.MCREGNMRCG.DE0%10%20%30%40%50%60%70%80%90%100%0%10%20%30%40%50%60%70%US sales%Unique201 8 Total Reported Rebates%LeastuniqueMostuniqueSource:Company data,Credit Suisse estimatesSource:Company data,Credit Suisse estimatesFigure 4:Current and future uniqueness is key defence(2019E and%change to 2023E)Figure 5:Falling rebates may increase competition,but also increase utilisation for some companies-0.4-0.20.00.20.40.60.81.0Score on UniquenessUniquness:CurrentUniqueness:Expected changeUniquness Score-0.8-0.6-0.4-0.20.00.20.40.60.8Overall Score on Rebate WallRebate Wall:Inc.CompetitionRebate Wall:Higher UtlisationRebate Score Source:Company data,Credit Suisse estimatesSource:Company data,Credit Suisse estimatesFigure 6:International reference pricing hits Part B and categories inc.diabetes,CNS and MS Figure 7:Protected classes,changes could increase competition and rebate levels-0.4-0.3-0.2-0.10.0Exposure to Int Ref PricingInt Ref Prices-0.4-0.3-0.2-0.10.0Exposure to Int Ref PricingProtected cat.Source:Company data,Credit Suisse estimatesSource:Company data,Credit Suisse estimates29 April 2019Global Pharmaceuticals3Table of contentsExecutive summary4Scoring exposure to potential rebate reform5Overall company scoring10Lowest growth in US net prices since 200412Rebates by category and company16Who pays the biggest rebates?181.Increase in utilisation202.Breaking down the rebate wall253.International Reference Pricing Index304.Protected categories in Part D345.Portfolio uniqueness:The best defence against price pressures35Appendix 1:US price and rebate data40Appendix 2:Valuation45Appendix 3:Uniqueness detailed definitions48Appendix 4:CS Investor Sentiment Survey attitude to reform5029 April 2019Global Pharmaceuticals4Executive summaryUS prices still account for one-third of global net income growthIn 2018,US net prices accounted for one-third of total net income growth for our universe.This equated to+2.1ppt of EPS growth from US net price rises(down from+3ppt in 2017).but strong political pressure to lower drug prices persistsFollowing on from President Trumps Blueprint proposal(May 2018),there are a number of key approaches in focus that have the potential to significantly impact the global pharma companies under our coverage.We believe that these proposals will be an integral part of Trumps“promises made,promises kept”rhetoric ahead of 2020.In this report,we look in depth at the implications for the industry of both higher utilisation and the removal of rebates,and score companies both on this exposure and on their levels of uniqueness,which we see as the best defence against price pressure.The Proposed Removal of Safe Harbor for Anti-Kickback:We believe the elimination of rebates could be the most disruptive event for the US Healthcare industry in decades.Rebates today work to subsidise patient healthcare premiums but at current levels rebates may be politically unsustainable,given their impact on headline list prices.The HHS has estimated that removing rebates in Medicare would lower costs for the 30%of high prescription(Rx)utilisers,but raise costs for the remaining 70%of Medicare participants no longer receiving a general subsidy from overall drug rebates.In this report,we look to analyze the practical impact on the pharma companies under our coverage of the removal of rebates.The key areas of focus are:-Higher utilisation and lower abandonment rates:We believe eliminating rebates would likely reduce list prices to net prices.This would decrease patient copayments in Medicare(30%of the market see Figure 21).With lower patient cost,we assume there would be pressure to raise utilisation and lower abandonment rates.Our analysis shows this would likely favor drugs with an annual price below$20,000.If Medicare rebates are removed then we see commercial rebates as likely to follow.Whilst utilisation rates would be expected to rise for those with lower copays,we would expect pharmacy benefit managers(PBMs)to fight back hard with increased price pressure and increased utilisation management tools to limit the otherwise expected premium increases.-Breaking down rebate walls would create more price competition:Rebate walls have clearly protected first movers,which effectively have been able to limit the success of later entrants in the US.They have also allowed companies to accelerate adoption of related drugs,allowing franchises to be sustained.Without rebate walls,we would expect fast followers to be more competitive and we score the companies for their exposure to classes where competition could intensify.International reference pricing has been proposed by both Democrats and Republicans.However,we expect the Pharma industry to push back with the argument that lower international prices often reflect single-payer markets with limited choices.We note the apparent political will to reduce prices and score companies on the difference between US and international prices for key drug categories,going beyond just Part B drugs(as proposed by the Republicans)to include a wider group of important drugs(as proposed by the Democrats).Protected class reforms would increase competition in certain diseases.We highlight the exposure of companies to protected classes,where payers currently have less opportunity to restrict choice in Medicare.Benefits to pharma have been seen in lower rebates in categories such as HIV.We assume pressure will increase over time but see no imminent changes,with patients advocacy groups likely to be very active.29 April 2019Global Pharmaceuticals5Scoring exposure to potential rebate reformIn this years Rebate report we have chosen to score the impact of the four key US rebate reform proposals,as well as Uniqueness,which we believe is the best defense against US price pressures.We set out five key exposure parameters on which we base our company scoring:1.Increase in utilisation(20%)Companies with high exposure to government plans,low list prices and high rebates appear best placed to benefit from an increase in utilisationWe score companies based on their US exposure to drugs where we believe utilisation could rise.Changes in Medicare Part D and potential removal of rebates in high-rebate categories should result in significant reductions in patient copays.Lower copays will increase affordability of drugs,in our view,as the out-of-pocket costs are seen as a key reason for scripts not being filled and this could increase utilisation.Evidence from outside of the US,where patient copays are lower,is that filling prescriptions are higher.United Health has also pointed to a point-of-sales rebate program that effectively lowers costs by an average of$130 per Rx,improves adherence by 4-16%.In Figure 8 we highlight the percentage of 2019 expected US sales derived by drugs that qualify for Part D at different price points(at list prices).Novo scores very well on this parameter and in a separate report we upgrade Novo Nordisk to Outperform from Neutral as we expect it will be a strong beneficiary from the removal of rebates given its low diabetes prices and high rebates for diabetes drugs.Lilly also scores well due to its exposure to diabetes,with some higher-priced exposure from Alimta and Taltz,as does Bayer through oral contraceptives and its economic exposure to Xarelto.Amongst the specialty companies,Almirall scores well in dermatology and UCB in epilepsy.For many of the others,most sales are paid for outside of Part D.Figure 8:US drugs at different price points,ranked by Part D eligible drugs under$20,000 WAC p.a.0%10%20%30%40%50%60%70%80%90%100%Below$5K/yr$5-10K/yr$10-20K/yr$20K/yrPart B/OtherSource:Company data,Credit Suisse estimates29 April 2019Global Pharmaceuticals62.Breaking down the rebate wall(20%)Breaking down the rebate wall can drive price competition for similar productsWe score company exposure to classes where a current dominant player may no longer be able to evergreen a franchise via very high levels of rebates.We give a company a negative score for current dominance where they give a high rebate as removal of the rebate will drive competition.We give a positive score for being a smaller player or new entrant in a number of categories chosen because of our view on the importance of rebates in these areas today.We highlight AbbVies Humira in arthritis(RA),the SGLT-2s in diabetes(Jardiance,Invokana,and Farxiga),and novel anti-coagulants(Xarelto and Eliquis)as incumbents where the high rebates can effectively limit the incentive of plans to offer newcomers that are in their early days and unable to match the large rebates of newer drugs.Removing the rebate wall should mean later launches would be able compete with these established products on net pricing.This would create more explicit price competition for similar products,in our view.We see plans as likely to try to lower net prices in these categories,using the promise of exclusive formulary positioning for the lowest bidders,and exclusion for more expensive drugs to drive down net prices to offset any increase in utilisation.We also expect increased use of prior authorization and step therapy to limit utilization increases.We have mechanically scored companies that have exposure to areas of high rebates,weighting the scores to the sales exposure to the company.From our analysis,Roche scores most positively to the rebate wall exposure,benefiting from the rebate wall coming down in RA with Actemra.The lowest-scoring name is AbbVie which loses out from its exposure to Humira and RA.JNJ is also negatively impacted owing to its high rebates in psoriasis(Stelara),anticoagulants(Xarelto),and RA(Remicade),which may have protected the group from competition.Novartis may see stronger competition for Cosentyx.UCB benefits from easier competition in RA if rebate walls fall for anti-TNFs.Figure 9:Potential impact of exposure to areas with current high rebate walls(+ve score for smaller players,-ve score from dominant players in relevant categories)-2.00-1.50-1.00-0.500.000.501.001.502.00Scoring of rebate wall catagoriesNovel anticoagulantsRASpeciality dermOral diabetesRespiratory(Asthma)Dry EyeAggregate scoreSource:Company data,Credit Suisse estimates29 April 2019Global Pharmaceuticals73.International reference pricing(10%)Drug categories and companies most exposed to significant price differences We looked at approximately 100 companies to determine international reference prices on a drug-by-drug basis,allowing us to analyse the earnings impact on companies,disease areas,for the industry as a whole and also the impact on Medicare Part B drugs to assess the impact of the Trump administrations International Pricing Index proposal.Based on our analysis,we see a c.60%reduction of US net drug prices compared with an international reference price comprised of the average of prices from the UK,France and Germany.We score companies based on their earnings sensitivity to an international reference price focusing on Democratic proposals such as the Prescription Drug Price Relief Act,as we believe it is important to consider prices beyond just Medicare Part B.Under the Democrats proposal,we see a c.30%theoretical impact on earnings for major Pharma assuming no changes to the companies cost structures(Figure 10).Based on 201