Bristol-Myers Squibb Sues Over New Medicare Drug Pricing Program
June 17, 2023
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BRISTOL-MYERS ($NYSE:BMY): Bristol-Myers Squibb is a leading global biopharmaceutical company focused on discovering, developing, and delivering innovative medicines to improve patient health. Recently, they have taken legal action in an effort to battle the recently established Medicare drug pricing program. The lawsuit was filed in the U.S. District Court for the District of Columbia and alleges that the Department of Health and Human Services did not issue proper notice when establishing the Medicare Part B payment model for drugs. The lawsuit argues that this model would violate the Administrative Procedures Act by not providing sufficient notice and comment periods for the program.
Bristol-Myers Squibb is requesting that the court vacates the proposed rule and enjoins HHS from implementing the rule until it has properly sought public comment. Bristol-Myers Squibb is one of many drug companies that have raised concerns about the new Medicare drug pricing program, which could have a significant impact on their ability to make a profit. The outcome of this lawsuit will be closely watched by other pharmaceutical companies as it could set a precedent for how Medicare drug pricing is handled in the future.
Share Price
On Friday, BRISTOL-MYERS SQUIBB (BMS) filed a lawsuit against the US government over a new Medicare drug pricing program. The company argued that the program would harm their business by reducing its reimbursement rates for certain drugs. BMS stock opened at $64.9 and closed at $66.2, up by 2.3% from prior closing price of 64.7. This indicates that investors saw this lawsuit as an attempt to protect their profits and were in favor of it. The new Medicare drug pricing program was created to increase competition and lower prices for medications used by elderly and disabled Americans. BMS argues that the program will reduce their reimbursement rates for certain drugs, resulting in lower profits for the company. The company also alleges that the program could potentially prevent them from participating in future Medicare bidding processes, resulting in an unfair disadvantage.
The lawsuit is just one of several recent disputes between drug manufacturers and the US government over drug pricing. In April, Merck & Co. filed a similar suit against the government alleging that their reimbursement rates would be significantly reduced. This shows that there is a larger dispute over drug pricing that needs to be resolved. In the meantime, BRISTOL-MYERS SQUIBB remains hopeful that they will be able to protect their profits and continue to participate in future Medicare bidding processes. The stock market has reacted positively to this news, suggesting that investors are confident in the company’s ability to succeed in this lawsuit. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Bristol-myers Squibb. More…
| Total Revenues | Net Income | Net Margin |
| 45.85k | 7.31k | 17.2% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Bristol-myers Squibb. More…
| Operations | Investing | Financing |
| 12.22k | -1.37k | -14.36k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Bristol-myers Squibb. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 94.28k | 62.4k | 15.15 |
Key Ratios Snapshot
Some of the financial key ratios for Bristol-myers Squibb are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 13.9% | 21.2% | 21.8% |
| FCF Margin | ROE | ROA |
| 24.2% | 19.9% | 6.6% |
Analysis
GoodWhale has analyzed the fundamentals of BRISTOL-MYERS SQUIBB, and based on our Star Chart, we can conclude that it has a high health score of 8/10, considering its cashflows and debt. We believe that this company is capable to sustain future operations in times of crisis. Furthermore, BRISTOL-MYERS SQUIBB is strong in dividend, growth, profitability, and weak in asset. Based on this assessment, we classify it as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Investors interested in such companies may be those looking for steady dividend income, as well as those who are looking for moderate growth opportunities. BRISTOL-MYERS SQUIBB meets these two criteria and may be an attractive investment option for those investors. More…
Peers
The company was founded in 1887 and is headquartered in New York City. The company’s products are sold in over 100 countries. Bristol-Myers Squibb Co’s competitors include Merck & Co Inc, Amgen Inc, Eli Lilly and Co.
– Merck & Co Inc ($NYSE:MRK)
Merck & Co Inc is a global health care company that offers a wide range of products and services to customers in more than 140 countries. The company has a market cap of 236.25B as of 2022 and a Return on Equity of 28.84%. Merck & Co Inc is a diversified company that operates in four main business segments: Pharmaceuticals, Vaccines, Animal Health, and Consumer Care. The company’s products include prescription and over-the-counter medicines, vaccines, biologic therapies, and consumer and animal health products. Merck & Co Inc is one of the world’s largest pharmaceutical companies and is a leading provider of health care products and services.
– Amgen Inc ($NASDAQ:AMGN)
Amgen Inc is a large biotechnology company with a market cap of 132.76B as of 2022. The company has a strong return on equity of 460.37%. The company focuses on developing and delivering therapies for serious illnesses.
– Eli Lilly and Co ($NYSE:LLY)
Eli Lilly and Co is a pharmaceutical company with a market cap of 312.88B as of 2022. Its return on equity is 45.88%. The company focuses on the discovery, development, manufacture, and sale of pharmaceutical products. It offers products in the areas of endocrinology, diabetes, oncology, immunology, neuroscience, and erectile dysfunction.
Summary
Bristol-Myers Squibb is a global biopharmaceutical company that recently filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS) for a new Medicare drug pricing program. The lawsuit claims that the program, which would reduce manufacturer rebates and limit the number of drugs in the program, would harm seniors and cause disruptions to the pharmaceutical supply chain. Investors should assess the potential financial effects of the CMS policy in terms of net revenue, operating income, and earnings per share of Bristol-Myers Squibb. They should also consider any potential legal developments, as the lawsuit may be successful in overturning the new policy.
Additionally, investors should consider macroeconomic factors as they may affect the demand for Bristol-Myers Squibb’s products.
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