As pow­er shifts hands in Wash­ing­ton, a top an­a­lyst pre­dicts an un­avoid­able war over ris­ing drug prices

The drug in­dus­try has two pow­er­ful rea­sons for buck­ing Pres­i­dent Don­ald Trump’s cam­paign to cap and low­er drug prices. As Bern­stein’s Ron­ny Gal sees it, they have to keep drug prices mov­ing up­ward to meet Wall Street’s ex­pec­ta­tions on their num­bers.

Threat­en­ing to re­al­ly shove prices north is al­so a good bar­gain­ing chip for the price ne­go­ti­a­tions to come in Wash­ing­ton DC, he adds. And the in­dus­try may soon have a long­time al­ly among the De­moc­rats in a key po­si­tion to in­flu­ence any drug pric­ing leg­is­la­tion to come.

Ron­ny Gal

“The drug in­dus­try kind of has to come back to in­creas­ing prices,” Gal wrote in a note. “They will do so cau­tious­ly at first (eg CELG ‘med­ical cost in­fla­tion’ rate). If they don’t they will start miss­ing num­bers — in part be­cause net av­er­age prices will ac­tu­al­ly drop if they don’t as pa­tients grad­u­al­ly shift to low price chan­nels (Med­ic­aid, 340B).”

With the midterms now re­ced­ing in the back­ground, leav­ing the Dems in charge of the House, the bio­phar­ma in­dus­try has good rea­son to keep its pow­der dry as they try to stave off pol­i­cy changes that re­al­ly threat­ens their num­bers.

“Po­lit­i­cal­ly,” Gal writes, “phar­ma does not have to be as nice to PO­TUS now that CMS has pol­i­cy ideas that are an­ti­thet­i­cal to in­dus­try in­ter­est (the IPI, MA for­mu­la­ries). At the very least, threat­en­ing to raise prices gives in­dus­try a bar­gain­ing chip to ne­go­ti­ate some of these poli­cies away.”

An­na Es­hoo

The tidal shift in pow­er in Wash­ing­ton DC could come with a big bonus for in­dus­try lob­by­ists. An­na Es­hoo, a Cal­i­for­nia De­mo­c­rat who has helped craft big com­pro­mis­es on the lengthy ex­clu­siv­i­ty pe­ri­od grant­ed for bi­o­log­ics and more — to BIO’s im­mense sat­is­fac­tion — is mak­ing a bid to be­come chair of the Health Sub­com­mit­tee of the House En­er­gy and Com­merce Com­mit­tee. And she has the se­nior­i­ty to get it.

Frank Pal­lone

Gal, though, notes that Frank Pal­lone is slat­ed for the top seat on E&C, and he has in­di­cat­ed a will­ing­ness to work with Trump on pric­ing — not a pleas­ant prospect from the in­dus­try lob­by­ists’ per­spec­tive. In spe­cif­ic, Pal­lone has ad­vo­cat­ed a change al­low­ing Medicare to ne­go­ti­ate drug prices — rather than put a “Medicare for all” pro­vi­sion up for a vote.

Just be­fore the elec­tion Trump man­aged to rile up PhRMA with a pro­pos­al to es­sen­tial­ly im­port over­seas drug prices, forc­ing Medicare Part B to low­er drug prices to con­form with rates ne­go­ti­at­ed by sin­gle-pay­er na­tions like the UK. In part, that’s be­cause Trump wants to force the in­dus­try to force oth­er coun­tries to pay more for drugs, tak­ing some of the weight off the dom­i­nant US mar­ket. And in part it’s to low­er drug prices af­ter com­plain­ing for the last 2 years about the in­dus­try’s pric­ing strat­e­gy — which is to move high­er on their port­fo­lios year and year.

Pfiz­er moved the is­sue back on­to the pub­lic stage just days ago with its de­ci­sion to raise prices on 41 drugs, which rep­re­sents 10% of its com­mer­cial of­fer­ings, by an av­er­age of 5%. While that would have been a mod­el of re­straint 2 years ago, it trig­gered an im­me­di­ate back­lash from HHS, which has been com­ing up with new price re­forms for the pres­i­dent.

Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology

ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development

CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at with any issues.

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Video: Putting the AI in R&D — with Badhri Srini­vasan, Tony Wood, Rosana Kapeller, Hugo Ceule­mans, Saurabh Sa­ha and Shoibal Dat­ta

During BIO this year, I had a chance to moderate a panel among some of the top tech experts in biopharma on their real-world use of artificial intelligence in R&D. There’s been a lot said about the potential of AI, but I wanted to explore more about what some of the larger players are actually doing with this technology today, and how they see it advancing in the future. It was a fascinating exchange, which you can see here. The transcript has been edited for brevity and clarity. — John Carroll

Ted Ashburn. Oncorus

Cowen, Per­cep­tive lead $79.5M Se­ries B for 's­tand­out' biotech shep­herd­ing on­colyt­ic virus to clin­ic

As several Big Pharma players secure biotech partners in the oncolytic virus space for new immuno-oncology combos, Cowen and Perceptive Advisors have come out with their own bet on a startup that promises to shine.

The marquee investors are joining MPM, Deerfield, Celgene, Astellas, Arkin and UBS in backing the drug developer, Oncorus, which will now deploy the $79.5 million in Series B cash toward clinical development of its lead program. Other new investors include Surveyor Capital, Sphera Funds, IMM Investment, QUAD Investment Management, UTC Investment, SV Investment Corp and Shinhan Investment-Private Equity, the last five of which are Korean-based funds.

Fu­til­i­ty analy­sis au­gurs de­feat in piv­otal tri­al test­ing of Nu­Cana's lead drug in metasta­t­ic pan­cre­at­ic can­cer

Nearly two years after making its public debut, UK-based NuCana’s mission to make chemotherapies more potent and safer was dealt a blow, after a pivotal study testing its lead experimental drug halted enrollment in a hard-to-treat advanced form of cancer, following a futility analysis.

The drug, Acelarin, is being evaluated for use in metastatic pancreatic cancer patients who were not considered suitable for combination chemotherapy. In the late-stage ACELARATE study — which compared the experimental drug against the chemotherapy gemcitabine — 200 patients had been enrolled by the sponsor, Clatterbridge Cancer Centre, before an analysis from an independent safety and data monitoring panel suggested the study’s main goal would not be met.

UP­DAT­ED: As­traZeneca’s Imfinzi/treme com­bo strikes out — again — in lung can­cer. Is it time for last rites?

AstraZeneca bet big on the future of their PD-L1 Imfinzi combined with the experimental CTLA-4 drug tremelimumab. But once again it’s gone down to defeat in a major Phase III study — while adding damage to the theory involving targeting cancer with a high tumor mutational burden.

Early Wednesday the pharma giant announced that their NEPTUNE study had failed, with the combination unable to beat standard chemo at overall survival in high TMB cases of advanced non-small cell lung cancer. We won’t get hard data until later in the year, but the drumbeat of failures will call into question what — if any — future this combination can have left.

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UP­DAT­ED: Pay­back? An­a­lysts say Sarep­ta was blind­sided by an FDA re­jec­tion dri­ven by reg­u­la­to­ry re­venge

In one of the least anticipated moves of the year, the FDA has rejected Sarepta’s application for an accelerated approval of its Duchenne MD drug golodirsen after fretting over safety issues.

In a statement that arrived after the bell on Monday, Sarepta explained the CRL, saying:

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Levi Garraway. Broad Institute via Youtube

Roche raids Eli Lil­ly for its next chief med­ical of­fi­cer as San­dra Horn­ing plans to step down

We found out Monday morning where Levi Garraway was headed after he left Eli Lilly as head of oncology R&D a few days ago. Roche named Garraway as their new chief medical officer, replacing Sandra Horning, who they say is retiring from the company.

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Af­ter a posse of Wall Street an­a­lysts pre­dict a like­ly new win for Sarep­ta, we're down to the wire on a crit­i­cal FDA de­ci­sion

As Bloomberg notes, most of the Wall Street analysts that cover Sarepta $SRPT are an upbeat bunch, ready to cheer on the team when it comes to their Duchenne MD drugs, or offer explanations when an odd setback occurs — as happened recently with a safety signal that was ‘erroneously’ reported last week.

Ritu Baral Cowen
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