This Changes Everything for Biotech

My friend Adam Feuerstein is out with a highly provocative piece on TheStreet.com today about a new deal that could potentially change the entire drug pricing dynamic for the biotech sector…

The exclusive hepatitis C pharmacy deal struck between Express Scripts (ESRX) and AbbVie (ABBV) is a serious, perhaps permanent, blow to the multi-year biotech stock bull market.

The power to control drug prices in the U.S. now has shifted firmly to cost-cutting insurance carriers and pharmacy benefit managers. This means biotech companies, especially those facing competition, can’t guarantee the outsized profits investors have come to expect and crave.

After today, investors are no longer going to ask biotech executives, “What will you charge for your new drug?” Instead, the new question becomes: “What will Express Scripts — or any other pharmacy benefit manager — allow you to charge for your new drug?”

Keep reading:

Express Scripts and AbbVie Drug-Pricing Deal Might Devastate Biotech Bull Market (TheStreet)