That double headwind on the company's cardiovascular drug, which generated billions annually, is the most consequential near-term financial risk on AstraZeneca's balance sheet. The Inflation Reduction Act of 2022 now imposes direct government price negotiations on Farxiga and Croquence, creating a structural headwind that the company estimates as manageable but nonetheless represents a long-term margin compression risk. The rare disease segment, built on the Alexion acquisition, faces limited direct competition for complement inhibition in paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome, though Sanofi's ravulizumab biosimilar programs and Roche's crovalimab represent emerging threats. The most immediate threat to AstraZeneca's margin structure is the Inflation Reduction Act's Medicare price negotiation program, which selected Farxiga for the first round of negotiations in 2022 with Maximum Fair Prices taking effect in 2026, and Croquence for the second round with prices effective in 2027.
Yet in the rare disease segment, Soliris, the predecessor to Ultomiris, faces patent expiration in 2025, and while AstraZeneca has successfully converted the majority of patients to the longer-acting Ultomiris, the transition is not complete and biosimilar threats to the complement inhibitor class remain a long-term risk. The China risk is compounded by the potential for reimbursement restrictions on Tagrisso if the genetic test falsification allegations are proven, which could limit access to the drug for patients who genuinely need it.