.png)
Eye's on BioPharma Strategies
- Jana Chisholm
- Jun 10
- 7 min read
This week we've kept Eyes On the MFN Pricing and Tariff news, plus the Moderna x HHS Break-up and the Lilly x SiteOne Deal. The BioPharma Marketplace is in flux and we're watching to see how everyone is adapting and re-aligning their strategies.
Moderna’s $590 million contract with the Department of Health and Human Services (HHS) was terminated, casting doubt on the biotech’s ability to finance the vaccine’s late-stage development.
In 2024, Moderna secured a $176 million contract to develop mRNA-based pandemic influenza vaccines, and in January, the HHS expanded the agreement by providing $590 million to fund late-phase development. Moderna won the contract at the end of the Biden administration. In 2023, the biotech advanced mRNA-1018, an mRNA vaccine candidate that encodes for hemagglutinin glycoproteins, into a phase 1/2 trial.
However, at the end of this month, Moderna disclosed that the HHS had revoked the grant for late-stage development and the pre-pandemic influenza vaccine purchasing rights. The business is currently looking into other options for the avian flu vaccine’s late-phase development and production.
The announcement follows weeks after Robert F. Kennedy Jr. took office as HHS head and three months after the agency announced it was reviewing its agreement with the U.S. Big Biotech. In 2021, RFK Jr. dubbed the COVID-19 vaccine—which mostly uses mRNA—the worst vaccination ever created, and his nonprofit organisation attempted to have the FDA revoke its authorisation.
Moderna released information from their phase 1/2 trial of mRNA-1018 along with the news of the contract termination. Hemagglutination inhibition antibody titers were above the threshold of protection at baseline in 2.1% of the 300 people who participated in the experiment. Three weeks following the second of two doses, antibody titers over the threshold were present in 97.8% of subjects.
According to Moderna, there were no dose-limiting tolerability issues and the vaccine was generally well tolerated. Classified as grade 1 or 2, the majority of reported adverse events were minor and did not significantly increase between the first and second doses. At a forthcoming scientific meeting, Moderna intends to provide additional clinical data.
It was previously anticipated that Moderna would use the HHS funding to advance mRNA-1018 into late-phase development. In keeping with its strategic commitment to pandemic preparedness, the corporation stated that it is currently looking for alternatives.
The financing loss occurs as the biotech is reducing its expenditures. Moderna cut R&D expenditures by 19% during the first quarter. The business announced plans to reduce its operating costs by up to $1.7 billion at the same time.
For more details:
Eli Lilly’s efforts to develop next-generation painkillers are accelerating. In exchange for a non-opioid painkiller that is prepared to go through phase 2 trials, the Big Pharma has signed an agreement to buy SiteOne Therapeutics. According to Lilly, the arrangement may give SiteOne shareholders up to $1 billion in total, which would include an upfront payment and further payments linked to specific milestones.
Lilly’s target is STC-004, a sodium channel inhibitor designed to block the ion channel NaV1.8, which is mostly located in the peripheral nervous system and plays a role in pain perception. In a recent phase 1 trial, SiteOne evaluated STC-004 and discovered that a once-daily dosage of the medication candidate improved pain tolerance and was well-absorbed and tolerated.
In order to advance an early pipeline of painkiller candidates, the biotech secured a $100 million series C fundraise at the end of last year, spearheaded by Novo Holdings. The business is investigating other ion channel modulators, like NaV1.7, in addition to NaV1.8.
In their efforts to replace opioids, other NaV1.8 inhibitors have encountered difficulties. After releasing two NaV1.8-targeting assers in 2020, Vertex Pharmaceuticals, a biopharmaceutical company that has been searching for non-opioid painkillers for a long time, disclosed years later that another inhibitor was superior to a placebo in two phase 3 trials for pain relief but fell short of the opioid Vicodin.
Lilly and Pfizer previously partnered to develop the nerve growth factor inhibitor tanezumab as part of a next-generation painkiller partnership. However, after tanezumab was rejected by FDA and European Medicines Agency regulators, the partners eventually stopped using it. The candidate had shown the ability to reduce pain in patients with osteoarthritis, but faced concerns over a link to join damage.
For more details:
Pressure on the biopharma industry continues to increase under President Trump with MFN pricing and Tariffs.
Sanofi is joining the list of pharmaceutical companies that have committed billions to strengthen their operations in the United States.
Sanofi stated that it will increase its R&D and manufacturing activities in the United States by at least $20 billion by 2030. To help guarantee the production of medications in the United States, the firm announced that it will increase its manufacturing capacity at its existing U.S. locations and strengthen its partnerships with other domestic manufacturers. Many states will see a large rise in high-paying jobs as a result of the increased investment.
First- and best-in-class medications are being developed by Sanofi’s 13,000 U.S.-based personnel in a variety of therapeutic areas. 83,000 people worked for the organisation worldwide at the beginning of this year. In 2024, the United States accounted for 20 billion euros ($21.6 billion) of its net sales of 41.8 billion euros ($45.2 billion).
Sanofi’s strategy joins that of other pharmaceutical behemoths including Johnson & Johnson, Gilead Sciences, Novartis, and Eli Lilly, all of whom have recently spoken about their ambitions to invest in the United States.
After Trump’s planned Executive Order last week that aims to lower prescription prices in the United States based on a “Most Favoured Nation” pricing plan, Roche, which said three weeks ago that it would spend $50 billion in the U.S. over the next five years, announced it was open to reevaluating its promise.
Roche’s capacity to finance the large investments already announced in the United States will be called into question if the proposed Executive Order is implemented. The business fears that the Executive Order will weaken the United States’ standing as the world’s preeminent pharmaceutical and healthcare environment, impede economic expansion, and result in job losses in the country.
Before issuing the Executive Order, Trump suggested that he might be dropping his threat of imposing pharma-specific taxes on medications imported into the United States while complimenting pharmaceutical companies that had declared plans to increase their investments in the country.
Many branded drug manufacturers are well-positioned to withstand predicted challenges, even if the Trump administration’s threat of pharmaceutical import tariffs and most favoured nation (MFN) drug pricing has had a significant impact on the industry in recent months.
This was the view presented in a recent assessment by S&P Global, which indicated that some of the most alarming policies proposed by President Donald Trump are unlikely to come to pass as intended and that many multinational pharmaceutical businesses can withstand pricing pressures, trade penalties, and other factors.
However, according to experts, if carried out, Trump’s plan to implement a Most Favoured Nation (MFN) medication pricing policy—which would aim to reduce the difference between the prices of drugs in the United States and those in other nations—would be “highly negative” to the credit quality of branded pharmaceutical companies. Furthermore, smaller generics companies may suffer unintended consequences as a result of the administration’s efforts to increase biopharma competition and possibly apply pharma-specific tariffs, which would allow larger companies like Teva Pharmaceuticals and Amneal Pharmaceuticals to gain market share.
According to the analysts, a new drug pricing reform is on the horizon in the upcoming year due to the widespread bipartisan support for reducing the high cost of pharmaceuticals in the United States. However, considering the danger such a policy would represent to ongoing investment in U.S. drug development, the experts do not think highly disruptive measures like MFN pricing will succeed as currently described.
During his first administration, Trump tried an MFN strategy, but the pharmaceutical sector swiftly opposed it in court. Another judicial struggle is likely to break out if the second administration keeps pushing its new MFN policy. Furthermore, if it came to that, Congress might not genuinely support Trump’s planned price reforms.
However, things get a little trickier when it comes to tariffs. Branded pharmaceutical companies might be able to raise prices for medications with little competition if pharma-specific duties are put in place. However, the cost of medications covered by Medicare cannot be raised above the rate of inflation, and the Inflation Reduction Act will also allow for price negotiations for some of those medications.
In the end, it might make sense for big pharmaceutical companies to move more production to the United States, depending on tariff rates. However, those endeavours always entail high expenses and the possibility of functioning at a less favourable tax rate.
However, given how severe the Trump administration’s reciprocal tariffs on China have been, generic manufacturers may be severely impacted by future levies. A large number of generic medication manufacturers acquire their raw materials or host production activities in China.
Although this would have a significant impact on traditional generic pharmaceutical businesses, it would also provide larger generic medicine manufacturers, like Teva and Amneal, a chance to gain market share from those without U.S. manufacturing capabilities.
By expediting the licensing of generic and biosimilar medications, the Trump administration has also shown that it is interested in increasing industry competition. Once more, however, this would probably have unforeseen repercussions for the generic manufacturers of the vast majority of medications taken by Americans.
The administration has persisted in hinting at the possibility of imposing import taxes directly linked to pharmaceutical goods or the raw ingredients that go into making them.This month the government began a Section 232 probe to evaluate possible national security risks associated with pharmaceutical imports as part of that strategy. Under the Trade Expansion Act of 1962, the procedure will enable the president to implement trade restrictions in the event that risks are detected.
Regarding pricing, Trump signed an executive order in mid-May directing HHS to implement the president's MFN goals by linking government medication procurement costs to the lowest prices paid by other developed nations. The concept has since been clarified by HHS, which states that products in all markets without generic or biosimilar competition must match the costs of specific peer countries.
For more details:
If you are a PharmaTell Subscriber and can’t access the links, please contact us at helpdesk@pharmatell.com.
If you are not currently a subscriber, please contact us at info@pharmatell.com. We can provide more information about our services and a trial of PharmaTell Studio.
