By Katherine Hamilton
A change in Medicare policy is expected to flatten revenue from Gilead Science's HIV products, one of its most profitable segments.
The biopharmaceutical company anticipates reforms to Medicare Part D, a voluntary prescription drug coverage, will lop off $1.1 billion of its 2025 revenue with almost $900 million coming from HIV products. As a result, HIV revenue for the year is expected to be flat with 2024 at about $19.6 billion. Gilead estimates HIV product sales would have increased 5% in 2025 if it weren't for the added costs from the Medicare reforms.
The reforms are mandated by the Inflation Reduction Act and require Medicare prescription drug plans to allow enrollees to use capped monthly installments to pay for out-of-pocket prescription drugs.
It also requires drug manufacturers to provide discounts for patients during initial coverage and catastrophic phases, as well as for people who qualify for the low-income subsidy $(LIS.AU)$ program. LIS users are disproportionately impacted by HIV, Gilead said, which is why the change would have such a major impact on that business.
The HIV segment went a long way in boosting Gilead's earnings, with its product sales climbing 16% in the fourth quarter. Higher demand and volume made it the most profitable segment in the past quarter, and offset decreasing sales for its Covid-19 treatment.
Shares of Gilead were up 7% to $103.27 on Wednesday, at one point touching a 52-week high of $104.71, after fourth-quarter earnings and outlook beat Wall Street's expectations.
Write to Katherine at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
February 12, 2025 12:13 ET (17:13 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
免責聲明：投資有風險，本文並非投資建議，以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請，作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考，不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證，投資者應自行研究並在投資前尋求專業建議。