J&J to “price responsibly”, says CEO post Trump meeting
Johnson & Johnson’s CEO Alex Gorsky has a downbeat message for shareholders following his meeting with president Donald Trump.
Gorsky was one of a group of CEOs who met with Trump at the White House earlier this week and heard him outline protectionist policies that would see companies relocating outside the US paying a substantial border tax.
Trump has also pledged to crack down on high drug prices, and his press secretary Sean Spicer has confirmed this is one of the president’s priorities in the coming weeks. Shares in J&J ticked down following Gorsky’s comments.
In a conference call, Gorksy said it was “important to price responsibly”, noting the company had followed the example of companies such as Allergan and generally kept product price increases to below 10%.
J&J is also planning a “transparency report” about drug prices, according to Reuters, including expanded disclosures on US pricing, R&D expenses, and compassionate care programmes.
Gorsky said any plan to repeal and replace the Affordable Care Act should retain coverage for people with pre-existing conditions.
Overall Gorsky said Trump’s plans would neither hinder nor help J&J, which has begun to see declining sales for its key inflammatory diseases drug, Remicade (infliximab).
Pfizer began marketing a cheaper biosimilar of Remicade in the US late last year, and sales of J&J’s original product slipped 1.7% in Q4 to $1.17 billion in the US.
In Europe, where MSD markets Remicade, biosimilars have been on the market for a couple of years and have already had an impact on sales, although this has varied from country to country.
Fourth quarter results from J&J were below analysts’ estimates, as were its forecasts for 2017. Q4 sales rose 1.7% to $18.1 billion but this was below average analyst estimates of $18.28 billion, according to Thomson Reuters figures – although earnings of $1.58 per share beat the average estimate by 2%.
J&J forecast 2017 adjusted earnings of $6.93 to $7.08 per share on revenue of $74.1 billion to $74.8 billion, below the average analyst estimate for a profit of $7.11 per share on revenue of $75.10 billion.
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