AstraZeneca CEO Pascal Soriot said the $37 billion pharmaceutical company is unsure of its future in vaccines and expects slower drug rollouts due to the Inflation Reduction Act, according to an exclusive interview with Reuters Aug. 23.
AstraZeneca partnered with University of Oxford in April 2020 to develop a COVID-19 vaccine, which the United Kingdom was first to approve in December 2020. Described by The Wall Street Journal as "a workhorse for lower-income countries," 148 countries have approved Vaxzevria — its proper name. It has still not received U.S. approval.
Production delays, probes by regulators after rare cases of severe side effects and concerns about its comparatively short shelf life have interfered with adoption of the company's COVID-19 vaccine, Reuters reports.
AstraZeneca created a separate division for vaccines and antibody therapies in 2021, but its future is less than sure. Mr. Soriot said about the future of its COVID-19 vaccinemaking: "I can't be sure we will be there or not."
He also said he is unsure if AstraZeneca would expand its vaccine offerings for other infections.
Mr. Soriono forecasted to Reuters a tightening of the drug development pipeline moving forward due to the Inflation Reduction Act, which President Joe Biden signed into law Aug. 16.
Under the IRA, Medicare Parts B and D gain negotiation powers that will apply to the price of a limited number of drugs with no generic or biosimilar competition. Starting in 2026, 10 drugs will be eligible for negotiations. Eligibility expands to 20 drugs by 2029.
If drugmakers do not comply with the price proposed by HHS, they face a tax on sales of the drug ranging from 65 percent to 95 percent. The drug's sales revenues will be taxed 65 percent during the first 90 days of noncompliance, 75 percent for sales in the 91st to 180th days of noncompliance, 85 percent for sales in the 181st to 270th days of noncompliance, and 95 percent for sales after the 270th day of noncompliance.
Mr. Soriot said Medicare's new negotiation abilities, while they will not take effect immediately, could interfere with the current system of patent protection, in which pharmaceutical companies are able to recoup their investment in developing a drug over nine to 11 years. He also said the law appeared to be structured as more of an "imposition of price" and less of a negotiation.
Mr. Soriot has served as CEO of AstraZeneca since October 2012.