Regeneron Pharmaceuticals Inc.’s REGN agreement with the federal government to limit the list price of any new COVID monoclonal antibody commercialized as a result of their public-private partnership may have “far-reaching consequences” for drug pricing, Beacon Policy Advisors analysts wrote in a note Friday. Under the deal, part of the federal government’s Project NextGen initiative to accelerate development of new COVID vaccines and treatments, Regeneron agreed that the U.S. list price of any new product stemming from the partnership will be less than or equal to its price in comparable markets globally, the U.S. Department of Health and Human Services announced last week. The announcement is “groundbreaking,” Beacon analysts wrote in the note Friday, because it’s the first time the federal government has successfully limited the price of a pharmaceutical product based on international reference pricing and used that concept to limit the launch price of a new product. Regeneron is set to receive up to $326 million in government funding to support the development of the new COVID treatment through Project NextGen, the company announced last month. The new pricing deal signals that “the use of international reference prices remains firmly a part of the wider discussion of how to reduce prescription drug prices,” the Beacon note said, and could become a Centers for Medicare and Medicaid Services demonstration project under a second Biden administration or a renewed area of focus if former President Donald Trump were to regain the White House. Regeneron shares were up 0.7% premarket on Friday and have gained 15.4% in the year to date, while the S&P 500 SPX has gained 17.3%.

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