UP­DAT­ED: Am­gen halts some drug dis­counts for safe­ty net hos­pi­tals as SCO­TUS takes on 340B case

Am­gen will soon be the 10th bio­phar­ma com­pa­ny to pull back on of­fer­ing drug dis­counts to con­tract phar­ma­cies of safe­ty-net hos­pi­tals un­der a fed­er­al pro­gram. Like its peers, Am­gen ar­gues that the growth of these con­tract phar­ma­cies has bal­looned in re­cent years and needs to be reigned in.

Be­gin­ning Jan. 3, 2022, Am­gen’s pol­i­cy will on­ly al­low 340B cov­ered hos­pi­tals to des­ig­nate a sin­gle phar­ma­cy lo­ca­tion, with the ex­cep­tion of fed­er­al grantees and con­tract phar­ma­cies whol­ly owned by a 340B hos­pi­tal, or that have com­mon own­er­ship with a health sys­tem.

Am­gen said in a state­ment:

The Com­pa­ny is con­cerned with the well-doc­u­ment­ed is­sues about pro­gram in­tegri­ty aris­ing from ex­pan­sion of con­tract phar­ma­cy arrange­ments in re­cent years.  In the decade since the Health Re­sources & Ser­vices Ad­min­is­tra­tion (HRSA) ex­pand­ed its con­tract phar­ma­cy pol­i­cy, the num­ber of con­tract phar­ma­cy arrange­ments in the 340B pro­gram has grown by a stag­ger­ing 4,000%.  More than 50% of the prof­its gen­er­at­ed by con­tract phar­ma­cies are re­tained by for-prof­it com­pa­nies, di­vert­ing re­sources from fed­er­al grantees and oth­er cov­ered en­ti­ties that pro­vide care to unin­sured and vul­ner­a­ble pa­tients.

The move aligns Am­gen with Eli Lil­ly, Mer­ck, UCB, Sanofi, No­vo Nordisk, Unit­ed Ther­a­peu­tics, No­var­tis, Boehringer In­gel­heim and As­traZeneca. All of the com­pa­nies have cur­tailed their dis­counts to dif­fer­ing de­grees, and some of them have been threat­ened with fines by the Biden ad­min­is­tra­tion and have since tak­en the is­sue of the ad­min­is­tra­tion’s han­dling of the 340B pro­gram to court.

So far those court de­ci­sions have been a mixed bag for in­dus­try.

Wash­ing­ton DC’s dis­trict court hand­ed No­var­tis a clear win ear­ly last month, ar­gu­ing that the Big Phar­ma can place con­di­tions on the sales of drugs dis­count­ed by a fed­er­al pro­gram to con­tract phar­ma­cies, fol­low­ing an Eli Lil­ly win in court ear­li­er in No­vem­ber. But this in­ter­pre­ta­tion was con­tra­dict­ed by an­oth­er de­ci­sion hand­ed down last month in a New Jer­sey dis­trict court, in which No­vo Nordisk and Sanofi were told that they can­not uni­lat­er­al­ly im­pose re­stric­tions on the 340B pro­gram and that their new poli­cies “must cease.”

340B hos­pi­tals are sound­ing the alarm on Am­gen and UCB’s re­cent en­tries in­to this more re­stric­tive space.

“Am­gen’s de­ci­sion to fol­low the path of oth­er drug com­pa­nies in vi­o­lat­ing the fed­er­al 340B law will great­ly mag­ni­fy the harm that these re­fusals are caus­ing for safe­ty-net hos­pi­tals and the pa­tients in need who re­ly on them. Two fed­er­al dis­trict courts have ruled that drug com­pa­nies can­not refuse these dis­counts or im­pose con­di­tions on them, and the ad­min­is­tra­tion and a bi­par­ti­san ma­jor­i­ty of Con­gress strong­ly agree,” 340B Health pres­i­dent and CEO Mau­reen Testoni said in a state­ment.

SCO­TUS on 340B

Mean­while, the US Supreme Court on Tues­day heard oral ar­gu­ments re­lat­ed to an­oth­er 340B dis­pute. This case deals with a rule from 2017 in which CMS said Medicare would re­im­burse some cov­ered out­pa­tient drugs pur­chased through the 340B pro­gram at low­er rates.

Ac­cord­ing to the Com­mon­wealth Fund, the rule re­duced re­im­burse­ments for 340B hos­pi­tals to 22.5% be­low the av­er­age sales price of a drug; and non-340B hos­pi­tals con­tin­ued to be paid 6% above the ASP. The change in pay­ments saved Medicare and ben­e­fi­cia­ries an es­ti­mat­ed $1.6 bil­lion in 2018, but hos­pi­tals claimed that they were un­fair­ly tar­get­ed.

The back and forth be­tween the jus­tices and for­mer so­lic­i­tor gen­er­al Don­ald Ver­ril­li, who ar­gued the case for the hos­pi­tals, cen­tered most­ly on whether CMS could legal­ly set this low­er re­im­burse­ment rate, with sev­er­al jus­tices seem­ing to sup­port Ver­ril­li’s ar­gu­ments, ac­cord­ing to the tran­script.

Michi­gan law pro­fes­sor Nico­las Bagley al­so wrote at the SCO­TUS blog that the jus­tices seemed to back the claim that CMS “over­stepped its au­thor­i­ty when it cut the amount that it paid cer­tain hos­pi­tals for drugs they dis­pensed in their out­pa­tient de­part­ments. None of the jus­tices voiced sym­pa­thy with the gov­ern­ment’s ar­gu­ment that Con­gress had pre­clud­ed ju­di­cial re­view of the ques­tion.”

Ed­i­tor’s note: Ar­ti­cle up­dat­ed with com­ment from Am­gen.

ZS Per­spec­tive: 3 Pre­dic­tions on the Fu­ture of Cell & Gene Ther­a­pies

The field of cell and gene therapies (C&GTs) has seen a renaissance, with first generation commercial therapies such as Kymriah, Yescarta, and Luxturna laying the groundwork for an incoming wave of potentially transformative C&GTs that aim to address diverse disease areas. With this renaissance comes several potential opportunities, of which we discuss three predictions below.

Allogenic Natural Killer (NK) Cells have the potential to displace current Cell Therapies in oncology if proven durable.

Despite being early in development, Allogenic NKs are proving to be an attractive new treatment paradigm in oncology. The question of durability of response with allogenic therapies is still an unknown. Fate Therapeutics’ recent phase 1 data for FT516 showed relatively quicker relapses vs already approved autologous CAR-Ts. However, other manufacturers, like Allogene for their allogenic CAR-T therapy ALLO-501A, are exploring novel lymphodepletion approaches to improve persistence of allogenic cells. Nevertheless, allogenic NKs demonstrate a strong value proposition relative to their T cell counterparts due to comparable response rates (so far) combined with the added advantage of a significantly safer AE profile. Specifically, little to no risk of graft versus host disease (GvHD), cytotoxic release syndrome (CRS), and neurotoxicity (NT) have been seen so far with allogenic NK cells (Fig. 1). In addition, being able to harness an allogenic cell source gives way to operational advantages as “off-the-shelf” products provide improved turnaround time (TAT), scalability, and potentially reduced cost. NKs are currently in development for a variety of overlapping hematological indications with chimeric antigen receptor T cells (CAR-Ts) today, and the question remains to what extent they will disrupt the current cell therapy landscape. Click for more details.

Graphic: Kathy Wong for Endpoints News

What kind of biotech start­up wins a $3B syn­di­cate, woos a gallery of mar­quee sci­en­tists and re­cruits GSK's Hal Bar­ron as CEO in a stun­ner? Let Rick Klaus­ner ex­plain

It started with a question about a lifetime’s dream on a walk with tech investor Yuri Milner.

At the beginning of the great pandemic, former NCI chief and inveterate biotech entrepreneur Rick Klausner and the Facebook billionaire would traipse Los Altos Hills in Silicon Valley Saturday mornings and talk about ideas.

Milner’s question on one of those mornings on foot: “What do you want to do?”

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Sec­ondary patents prove to be key in biosim­i­lar block­ing strate­gies, re­searchers find

While the US biosimilars industry has generally been a disappointment since its inception, with FDA approving 33 biosimilars since 2015, just a fraction of those have immediately followed their approvals with launches. And more than a handful of biosimilars for two of the biggest blockbusters of all time — AbbVie’s Humira and Amgen’s Enbrel — remain approved by FDA but still have not launched because of legal settlements.

FDA+ roundup: FDA's neu­ro­science deputy de­parts amid on­go­ing Aduhelm in­ves­ti­ga­tions; Califf on the ropes?

Amid increased scrutiny into the close ties between FDA and Biogen prior to the controversial accelerated approval of Aduhelm, the deputy director of the FDA’s office of neuroscience has called it quits after more than two decades at the agency.

Eric Bastings will now take over as VP of development strategy at Ionis Pharmaceuticals, the company said Wednesday, where he will provide senior clinical and regulatory leadership in support of Ionis’ pipeline.

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Hal Barron (GSK via YouTube)

GSK R&D chief Hal Bar­ron jumps ship to run a $3B biotech start­up, Tony Wood tapped to re­place him

In a stunning switch, GlaxoSmithKline put out word early Wednesday that R&D chief Hal Barron is exiting the company after 4 years — a relatively brief run for the man chosen by CEO Emma Walmsley in late 2017 to turn around the slow-footed pharma giant.

Barron is being replaced by Tony Wood, a close associate of Barron’s who’s taking one of the top jobs in Big Pharma R&D. He’ll be closer to home, though, for GSK. Barron has been running a UK and Philadelphia-based research organization from his perch in San Francisco.

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Chamath Palihapitiya and Pablo Legorreta

Bil­lion­aires Chamath Pal­i­hapi­tiya and Pablo Legor­re­ta hatch an $825M SPAC for cell ther­a­py biotech

Three years after Royalty Pharma chief Pablo Legorreta led a group of investors to buy up a pair of biotechs and create a new startup called ProKidney, the biotech is jumping straight into an $825 million public shell created by SPAC king and tech billionaire Chamath Palihapitiya.

ProKidney was founded 6 years ago but really got going at the beginning of 2019 with the $62 million acquisition of inRegen, which was working on an autologous — from the patient — cell therapy for kidney disease. After extracting kidney cells from patients, researchers expand the cells in the lab and then inject them back into patients, aiming to restore the kidneys of patients suffering from CKD.

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CBO: Medicare ne­go­ti­a­tions will ham­per drug de­vel­op­ment more than pre­vi­ous­ly thought

As President Biden’s Build Back Better Act — and, with it, potentially the Democrats’ last shot at major drug pricing reforms in the foreseeable future — remains on life support, the Congressional Budget Office isn’t helping their case.

The CBO last week released a new slide deck, outlining an update to its model on how Medicare negotiations might take a bite out of new drugs making it to market. The new model estimates a 10% long-term reduction in the number of new drugs, whereas a previous CBO report from August estimated that 8% fewer new drugs will enter the market over 30 years.

Joshua Brumm, Dyne Therapeutics CEO

FDA or­ders DMD tri­al halt, rais­ing ques­tions about a whole class of promis­ing drugs

Dyne Therapeutics’ stock took a nasty hit this morning after the biotech put out word that the FDA had slapped a clinical hold on their top program for Duchenne muscular dystrophy. And now speculation is bouncing around Biotwitter that there could be a class effect at work here that would implicate other drug developers in the freeze.

Dyne execs didn’t have a whole lot to say about why the FDA sidelined their IND for DYNE-251 in DMD while “requesting additional clinical and non-clinical information for” the drug.

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Michel Vounatsos, Biogen CEO (Credit: World Economic Forum/Ciaran McCrickard)

An un­ortho­dox pro­pos­al for Bio­gen's Medicare-man­dat­ed Aduhelm tri­al

Biogen has gone full blitz since Medicare announced it would only cover its new Alzheimer’s drug when used in clinical trials, accusing the agency of discriminating against Alzheimer’s patients and trying to get physicians to change regulators’ minds.  Critics, meanwhile, cheered what they see as a necessary wall protecting payers and patients from an unproven and unsafe drug.

Far less attention, though, has gone to what a Medicare-funded clinical trial would actually look like. Biogen has operated as if it would be a standard late-stage Alzheimer’s trial, enrolling a couple thousand patients and giving half placebo.

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