A while back we began some high level research into where big pharma was making money. We started with a review of pharmaceutical spend by Medicare and Medicaid and came to some fascinating conclusions. We were so impressed with the data that we decided to open small positions in GILD and ABBV.
Continuing on the research journey we decided to dig a little deeper and we started with looking at a global perspective. According to Statista, the most popular medications around the world in 2020 include:
- Humira by Abbvie
- Keytruda by Merck
- Revlimid by BMS
- Eliquis by BMS/Pfizer
- Stelara by Janssen Biotech
- Opdivo by BMS/Ono Pharm
- Imbruvica by Abbvie
- Biktarvy by Gilead
- Xarelto by Bayer/J&J
How does that compare to our Medicaid and Medicare research?
And what about Medicaid?
Prescription drugs Humira, Revlimid and Biktarvy seem popular globally, with Medicare and Medicaid. So what is Humira, Revlimid and Biktarvy used in patients? According to the Medicare website:
Lenalidomide (generic name for Revlimid) is used to treat various types of cancers. It works by slowing or stopping the growth of cancer cells. It is also used to treat anemia in patients with certain blood/bone marrow disorders (myelodysplastic syndromes-MDS). Lenalidomide may lessen the need for blood transfusions. Lenalidomide is not recommended for the treatment of a certain type of cancer (chronic lymphocytic leukemia) because of the increased risk of serious heart-related side effects and death. If you have this type of cancer, talk to your doctor about the risks of using this medication.
(Biktarvy) This combination product is used by itself to help control HIV infection. It helps to decrease the amount of HIV in your body so your immune system can work better. This lowers your chance of getting HIV complications (such as new infections, cancer) and improves your quality of life. This product is a combination of 3 different drugs: bictegravir, emtricitabine, and tenofovir alafenamide. Bictegravir is called an integrase strand transfer inhibitor-INSTI. Emtricitabine is called a nucleoside reverse transcriptase inhibitor, while tenofovir alafenamide is called a nucleotide reverse transcriptase inhibitor. Emtricitabine and tenofovir alafenamide are often called NRTIs. Bictegravir/emtricitabine/tenofovir alafenamide is not a cure for HIV infection. To decrease your risk of spreading HIV disease to others, do all of the following: (1) continue to take all HIV medications exactly as prescribed by your doctor, (2) always use an effective barrier method (latex or polyurethane condoms/dental dams) during all sexual activity, and (3) do not share personal items (such as needles/syringes, toothbrushes, and razors) that may have contacted blood or other body fluids. Consult your doctor or pharmacist for more details.
Adalimumab (generic name for Humira) is used to reduce pain and swelling due to certain types of arthritis (such as rheumatoid, psoriatic, juvenile idiopathic, ankylosing spondylitis). This medication is also used to treat certain skin disorders (such as plaque-type psoriasis, hidradenitis suppurativa). It works by blocking a protein (tumor necrosis factor or TNF) found in the body’s immune system that causes joint swelling and damage in arthritis as well as red scaly patches in psoriasis. Adalimumab belongs to a class of drugs known as TNF blockers. By reducing joint swelling, this medication helps to reduce further joint damage and preserve joint function. Adalimumab is also used to treat certain bowel conditions (Crohn’s disease, ulcerative colitis) and a certain eye disease (uveitis).
CMS.GOV
From a global perspective all three drugs seems to have the potential for growth especially as the baby boomer and global population continue to age for Humira and Revlimid. And part or the reason we look through a global lens is because when we look at specific countries like the U.S., the make up is different. The most popular drug according to SingleCare based on their data is Lisinopril but that drug ranks low in other data sets and also has low growth rates in Medicare spend.
Our analysis into the pharmaceuticals industry led us to open some small positions in ABBV and GILD. We will grow our positions in these stocks on pullbacks and market corrections and monitor trends and adjust accordingly.