AMGN · 10-Q · 2026Q3 · Full report

Medicare Drug Price Setting

AMGEN INC · 2026-11-04 · Importance 58 · Surprise 42 · In source text

In January 2025, the Centers for Medicare & Medicaid Services selected Otezla for Medicare price setting, applicable beginning January 1, 2027. Amgen says the earlier-than-anticipated selection reduced estimated future U.S. cash flows and triggered impairment reviews of the product’s developed-product-technology rights. In the third quarter of 2025, an updated discounted cash flow analysis produced a $3.0 billion fair value against a $3.4 billion carrying value, following an earlier first-quarter analysis that valued the asset at $4.0 billion versus a $4.8 billion carrying value. Impairment charges totaled $1.2 billion for the nine months ended September 30, 2025.

Key facts

• CMS selected Otezla for Medicare price setting in January 2025, applicable beginning in 2027, and Amgen expects further net selling price declines beginning in 2027. source
• Otezla's developed-product-technology rights had a $4.8 billion carrying value and a $4.0 billion fair value in the first quarter of 2025, resulting in a partial impairment charge. source
• A third-quarter 2025 Otezla impairment analysis resulted in a $3.0 billion fair value, below the $3.4 billion carrying value, and an additional impairment charge. source
• CMS selected Otezla for Medicare price setting in January 2025, with the price setting applicable beginning January 1, 2027. source
• Other operating expenses in the three and nine months ended September 30, 2025 included Otezla intangible asset impairment charges of $400 million and $1.2 billion, respectively, following its IRA price-setting selection. source
• CMS selected ENBREL for Medicare price setting beginning in 2026 and Otezla beginning in 2027. source
• CMS's selection of Otezla for Medicare price setting resulted in a decrease in the estimated future U.S. cash flows for the product. source

Impact estimates