A jog down mem­o­ry lane: How many times have De­moc­rats tried and failed to win drug price ne­go­ti­a­tions?

Af­ter more than a decade of failed at­tempts at pass­ing a bill to al­low Medicare to ne­go­ti­ate drug prices, De­moc­rats this au­tumn may be on the cusp of van­quish­ing their past.

Since at least 2007, var­i­ous forms of drug pric­ing leg­is­la­tion have lin­gered and seen ex­ten­sive op­po­si­tion from Re­pub­li­cans, who’ve long main­tained that ma­jor cuts to Big Phar­ma prof­its could spell the end of the next promis­ing drug be­fore it even be­gins to be de­vel­oped.

Two ma­jor things have changed be­tween 2007 and now: One, De­moc­rats on­ly need a sim­ple ma­jor­i­ty (and they have a sim­ple ma­jor­i­ty) in the Sen­ate to pass a bill, via a process known as rec­on­cil­i­a­tion. That’s a must-have, con­sid­er­ing how many Re­pub­li­cans will like­ly op­pose a bill that pro­vides the gov­ern­ment with ne­go­ti­at­ing pow­er.

The oth­er key: the amount of mon­ey at stake, in terms of not on­ly slow­ing down bio­phar­ma R&D in some ca­pac­i­ty, as PhRMA will ex­plain to any­one who will lis­ten, but on the oth­er side too: gov­ern­ment sav­ings and po­ten­tial­ly more mon­ey in pa­tients’ pock­ets.

So how much might the gov­ern­ment save with these types of ne­go­ti­a­tions? The non­par­ti­san CBO re­cent­ly es­ti­mat­ed that ne­go­ti­a­tion pro­vi­sions in House Speak­er Nan­cy Pelosi’s drug pric­ing bill (which, so far, still re­mains in the grave­yard of drug price ne­go­ti­a­tion bills), would re­duce fed­er­al spend­ing by about $450 bil­lion over the next decade.

Tak­ing a step back, and to bet­ter frame what may or may not end up be­ing an im­pact­ful au­tumn in the land of drug pric­ing, here’s what’s been in­tro­duced in re­cent years, why we’re in this cur­rent po­si­tion, and why De­moc­rats have been ea­ger to re­al­ize these po­ten­tial sav­ings, de­spite the many un­knowns around R&D pres­sure.

Mul­ti­ple, un­suc­cess­ful at­tempts

The gov­ern­ment’s in­abil­i­ty to ne­go­ti­ate drug prices be­gan with a law from al­most 20 years ago, known as the Medicare Pre­scrip­tion Drug, Im­prove­ment, and Mod­ern­iza­tion Act of 2003, which ex­press­ly for­bids gov­ern­ment drug price ne­go­ti­a­tions, stat­ing in its so-called “non­in­ter­fer­ence” clause, “the [HHS] Sec­re­tary may not in­ter­fere with the ne­go­ti­a­tions be­tween drug man­u­fac­tur­ers and phar­ma­cies and PDP spon­sors and may not re­quire a par­tic­u­lar for­mu­la­ry or in­sti­tute a price struc­ture for the re­im­burse­ment of cov­ered part D drugs.”

Ever since, al­low­ing Medicare ne­go­ti­a­tions be­tween the gov­ern­ment and bio­phar­ma com­pa­nies has been a pet project of De­moc­rats, par­tic­u­lar­ly as it might lead to these po­ten­tial­ly sig­nif­i­cant sav­ings. In ad­di­tion to fed­er­al sav­ings, De­moc­rats may be look­ing to bring down the prices of spe­cial­ty drugs, which ac­cord­ing to a 2019 Con­gres­sion­al Re­search Ser­vice re­port, are about 1% of Part D pre­scrip­tions but ac­count for more than 25% of spend­ing, which is an in­crease from 6% in 2007.

Sen. Ron Wyden (D-OR), who’s tak­ing the lead in craft­ing the De­moc­rats’ drug pric­ing pro­pos­al for this fall, pre­vi­ous­ly craft­ed a bi­par­ti­san drug pric­ing bill in 2019 with Sen. Chuck Grass­ley (R-IA) but that bill did not in­clude Medicare ne­go­ti­a­tions. Wyden has been work­ing on the is­sue since at least 2007, when he re­ceived word from the CBO that the fed­er­al gov­ern­ment can’t just use car­rots but may al­so need a stick to get low­er prices.

“Ne­go­ti­a­tion is like­ly to be ef­fec­tive on­ly if it is ac­com­pa­nied by some source of pres­sure on drug man­u­fac­tur­ers to se­cure price con­ces­sions. The au­thor­i­ty to es­tab­lish a for­mu­la­ry, set prices ad­min­is­tra­tive­ly, or take oth­er reg­u­la­to­ry ac­tions against firms fail­ing to of­fer price re­duc­tions could give the Sec­re­tary the abil­i­ty to ob­tain sig­nif­i­cant dis­counts in ne­go­ti­a­tions with drug man­u­fac­tur­ers,” the CBO said in 2007.

That same year, the House ac­tu­al­ly passed for­mer Michi­gan Rep. John Din­gell’s Medicare Pre­scrip­tion Drug Price Ne­go­ti­a­tion Act of 2007, which would’ve re­versed the ear­li­er law and al­lowed the HHS sec­re­tary to ne­go­ti­ate Part D prices with phar­ma­ceu­ti­cal man­u­fac­tur­ers, in­clud­ing on dis­counts, re­bates and oth­er price con­ces­sions. The vote was 255 to 170 in fa­vor, with 24 Re­pub­li­cans join­ing 231 De­moc­rats in ap­prov­ing the bill.

But for­mer Pres­i­dent George W. Bush threat­ened a ve­to, his HHS sec­re­tary said he wouldn’t even ne­go­ti­ate if he had the pow­er, and on the Sen­ate side, as the New York Times ex­plained, the De­moc­rats “could not muster the 60 votes need­ed to take up the leg­is­la­tion in the face of staunch op­po­si­tion from Re­pub­li­cans, who said that pri­vate in­sur­ers and their agents, known as phar­ma­cy ben­e­fit man­agers, were al­ready ne­go­ti­at­ing large dis­counts for Medicare ben­e­fi­cia­ries.”

Three years lat­er, Ver­mont De­mo­c­rat Pe­ter Welch and 61 of his peers in the House in­tro­duced the Medicare Pre­scrip­tion Drug Price Ne­go­ti­a­tion Act of 2010, with pro­ject­ed sav­ings of more than $150 bil­lion over 10 years. While the bill failed to pass, Welch has been at the fore­front of drug price ne­go­ti­a­tion bills, spon­sor­ing or co-spon­sor­ing mul­ti­ple drug price ne­go­ti­a­tion bills over the last decade.

Welch al­so worked with Reps. Lloyd Doggett and civ­il rights ad­vo­cate Eli­jah Cum­mings to in­tro­duce The Medicare Ne­go­ti­a­tion and Com­pet­i­tive Li­cens­ing Act of 2019. As House Over­sight com­mit­tee chair, Cum­mings put a lot of time and ef­fort in­to go­ing af­ter egre­gious phar­ma com­pa­nies, in­ves­ti­gat­ing mas­sive price spikes from the likes of the now-im­pris­oned Mar­tin Shkre­li in 2016 (al­though not as a re­sult of the Over­sight in­ves­ti­ga­tion), Bio­gen’s MS drug (see Tweet be­low), and the in­fa­mous Valeant Phar­ma­ceu­ti­cals back in 2015.

But the whack-a-mole ap­proach to com­bat­ing overnight drug price spikes has not re­sult­ed in sub­stan­tial sav­ings na­tion­wide.

In 2019, the same year Cum­mings died, Pelosi was able to pull to­geth­er enough votes to pass her Medicare price ne­go­ti­a­tion bill, named in hon­or of Cum­mings as the Eli­jah E. Cum­mings Low­er Drug Costs Now Act. The bill passed by a vote of 230 to 192, with an even slim­mer mar­gin than Din­gell’s bill. Again, how­ev­er, the Re­pub­li­can-con­trolled Sen­ate failed to take up Pelosi’s bill.

This year, Pelosi’s bill has been float­ed as an out­line for Sen­ate De­moc­rats’ di­rec­tion. Re­pub­li­cans al­so may be keen to build off the over­whelm­ing pub­lic sup­port for crack­ing down on drug prices. A West Health/Gallup sur­vey of more than 3,700 adults from June found near­ly all De­moc­rats (97%), In­de­pen­dents (80%), and the ma­jor­i­ty of Re­pub­li­cans (61%) sup­port em­pow­er­ing the fed­er­al gov­ern­ment to ne­go­ti­ate low­er prices of brand-name pre­scrip­tion drugs cov­ered by Medicare.

But lob­by­ing groups like PhRMA are des­per­ate­ly try­ing to re-frame the con­ver­sa­tion, buy­ing up ads to dri­ve away sup­port for any bill that in­cludes Medicare ne­go­ti­a­tions.

“They call it ne­go­ti­a­tion, but it re­al­ly means the gov­ern­ment de­cides what med­i­cines I can get,” a woman named Sue with type 1 di­a­betes said in a re­cent PhRMA ad at­tack­ing the pric­ing leg­is­la­tion.

De­moc­rats have trou­ble brew­ing among some of their own ranks too, as New Jer­sey Sen. Bob Menen­dez, whose dis­trict in­cludes bio­phar­ma com­pa­nies, said in Ju­ly that he had reser­va­tions about al­low­ing Medicare to ne­go­ti­ate. Ari­zona Sen. Kyrsten Sine­ma al­so has been show­ered with phar­ma dol­lars.

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His­toric drug pric­ing re­forms pass; Pfiz­er ac­quires GBT; The long search for non-opi­oid pain drugs; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

The Endpoints Weekly has officially crossed the 60,000 mark on subscribers — thanks to all of your support. As the editorial team grows, we’ve been able to do a lot more, with many of those on display this week. Be sure to check out Lei Lei Wu’s deep dive on pain R&D. If you missed it, you may also rewatch her companion panel here.

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Gold for adults, sil­ver for in­fants: Pfiz­er's Pre­vnar 2.0 head­ed to FDA months af­ter Mer­ck­'s green light

Pfizer was first to the finish line for the next-gen pneumococcal vaccine in adults, but Merck beat its rival with a jab for children in June.

Now, two months after Merck’s 15-valent Vaxneuvance won the FDA stamp of approval for kids, Pfizer is out with some late-stage data on its 20-valent shot for infants.

Known as Prevnar 20 for adults, Pfizer’s 20vPnC will head to the FDA by the end of this year for an approval request in infants, the Big Pharma said Friday morning. Discussions with the FDA will occur first and more late-stage pediatric trials are expected to read out soon, informing the regulatory pathway in other countries and regions.

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No­var­tis re­ports two pa­tient deaths af­ter treat­ment with Zol­gens­ma

Two children with spinal muscular atrophy have died after receiving Novartis’ Zolgensma, a gene therapy designed as a one-time treatment for the rare fatal disease.

The deaths, which resulted from acute liver failure, occurred in Russia and Kazakhstan, Novartis confirmed in a statement to Endpoints News. Having notified health authorities across all the markets where Zolgensma is available, it will update the drug label “to specify that fatal acute liver failure has been reported,” a spokesperson wrote.

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Senate Finance Committee Chair Ron Wyden (D-OR) (Francis Chung/E&E News/POLITICO via AP Images)

Sen­ate Fi­nance chair con­tin­ues his in­ves­ti­ga­tion in­to phar­ma tax­es with re­quests for Am­gen

Amgen is the latest pharma company to appear on the radar of Senate Finance Committee Chair Ron Wyden (D-OR), who is investigating the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills.

Like its peers Merck, AbbVie and Bristol Myers Squibb, Wyden notes how Amgen uses its Puerto Rico operations to consistently pay tax rates that are substantially lower than the U.S. corporate tax rate of 21%, with an effective tax rate of 10.7% in 2020 and 12.1% in 2021.

FDA ap­proves sec­ond in­di­ca­tion for As­traZeneca and Dai­ichi's En­her­tu in less than a week

AstraZeneca and Daiichi Sankyo’s antibody-drug conjugate Enhertu scored its second approval in less than a week, this time for a subset of lung cancer patients.

Enhertu received accelerated approval on Thursday to treat adults with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have activating HER2 (ERBB2) mutations, and who have already received a prior systemic therapy.

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J&J to re­move talc prod­ucts from shelves world­wide, re­plac­ing with corn­starch-based port­fo­lio

After controversially spinning out its talc liabilities and filing for bankruptcy in an attempt to settle 38,000 lawsuits, Johnson & Johnson is now changing up the formula for its baby powder products.

J&J is beginning the transition to an all cornstarch-based baby powder portfolio, the pharma giant announced on Thursday — just months after a federal judge ruled in favor of its “Texas two-step” bankruptcy to settle allegations that its talc products contained asbestos and caused cancer. An appeals court has since agreed to revisit that case.

CSL is gathering its four business units under a unified brand identity strategy (Credit: CSL company site)

CSL brings Se­qirus, Vi­for un­der par­ent um­brel­la brand in iden­ti­ty re­vamp

CSL is gathering its brands under the family name umbrella, renaming its vaccine and newly acquired nephrology specialty businesses with the parent initials.

CSL Seqirus and CSL Vifor join CSL Plasma and CSL Behring as the four now uniformly branded business units of the global biopharma. The Seqirus vaccine division was formed in 2015 with the combination of bioCSL and its purchase of Novartis’ flu vaccine business. CSL picked up Vifor Pharma late last year in an $11.7 billion deal for the nephrology, iron deficiency and cardio-renal drug developer.

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House pass­es his­toric drug pric­ing re­forms, lin­ing up decades-in-the-mak­ing win for Biden and De­moc­rats

The US House of Representatives today voted along party lines (all Dems voted for it), 220-207 to pass new, wide-ranging legislation that will allow Medicare drug price negotiations for the first time ever, and cap seniors’ drug expenses to $2,000 per year and seniors’ insulin costs at $35 per month.

Setting up a major victory for President Joe Biden, representatives returned from their summer recess to pass the Inflation Reduction Act, even as many noted the bill would only modestly reduce inflation.

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