AstraZeneca predicts major US healthcare changes under Trump

Pharmaceutical giant reports 4 per cent fall in revenue to $5.7 billion in third quarter

AstraZeneca’s third-quarter sales were hit by competition from multiple generic versions of its cholesterol fighter Crestor. Photograph: Luke MacGregor/Reuters

AstraZeneca’s third-quarter sales were hit by competition from multiple generic versions of its cholesterol fighter Crestor. Photograph: Luke MacGregor/Reuters

 

Pharmaceutical giant AstraZeneca expects major US healthcare changes after Donald Trump’s election victory but its chief executive warned on Thursday that pricing pressures in the world’s biggest pharmaceuticals market would not go away.

Pharmaceutical stocks surged on Mr Trump’s surprise win as fears of tough action on prices subsided, given the Republican president-elect’s focus on scrapping Obamacare rather than bearing down hard on drugmakers as Democrats demanded.

“Nobody knows what the new landscape will look like. It’s reasonable to assume it will change substantially,” said Pascal Soriot. “The US has always been a country that supports innovation and new differentiated medicines, and we hope it will remain the same. But we also believe we will continue to have to deal with price pressures.”

Lower sales

His comments came as AstraZeneca reported lower third-quarter sales, hit by competition from multiple generic versions of its cholesterol fighter Crestor.

Earnings, however, were propped up by a one-off tax gain, cost cuts and income from disposals.

Revenue in the quarter declined 4 per cent to $5.7 billion but core earnings per share, which exclude some items, rose 28 per cent to $1.32. Industry analysts had, on average, forecast quarterly revenue of $5.9 billion and earnings of 97 US cents a share.

The figures come as US rival Pfizer evaluates a potential sale or spin-off of its consumer health division that could value the unit at as much as $14 billion, according to sources.

A Pfizer exit from the consumer health business, which includes lip balm ChapStick and painkiller Advil, would be one of its biggest corporate moves since abandoning a $160 billion deal to buy Irish drugmaker Allergan earlier this year.

The deliberations are still in a preliminary stage and the New York-based pharmaceutical company may opt to retain the business, the people said.

Pfizer earlier this year decided against splitting itself into two companies, one housing its patent-protected drug business and one containing its generics business. Pfizer began openly planning for a possible split in early 2014, as a way to simplify its portfolio. – (Reuters)