As Trump fin­gers phar­ma on drug prices, ex­ecs step up with the lat­est vows of self dis­ci­pline

Ab­b­Vie’s Richard Gon­za­lez

Just as Don­ald Trump was rip­ping the lid off a can of whup-ass and pour­ing it all over the bio­phar­ma in­dus­try, Ab­b­Vie’s chief was step­ping up to fol­low Al­ler­gan CEO Brent Saun­ders’ lead on cap­ping an­nu­al drug price in­creas­es.

In a talk at the J.P. Mor­gan con­fer­ence, Ab­b­Vie CEO Richard Gon­za­lez pledged to keep the com­pa­ny’s an­nu­al price hikes on its drug port­fo­lio to sin­gle dig­its, in line with Saun­ders promise to keep Al­ler­gan’s in­creas­es to sin­gle dig­its. And No­vo Nordisk has al­ready fol­lowed up with its com­mit­ment to do the same, mark­ing a ma­jor shift in the way the in­dus­try han­dles drug prices af­ter years of swift spikes.

“There’s a strong de­bate go­ing on right now about pric­ing,” Gon­za­lez told in­vestors, ac­cord­ing to a re­port in Reuters. “We need to make sure we are op­er­at­ing in an ap­pro­pri­ate way … and demon­strat­ing the val­ue of the prod­ucts that we have.”

What Gon­za­lez ev­i­dent­ly wasn’t aware of was that Trump veered in­to the drug pric­ing is­sue dur­ing his press con­fer­ence on Wednes­day, vow­ing to ham­mer drug prices down through a fed­er­al bid­ding process af­ter the in­dus­try had been  “get­ting away with mur­der.”

Joaquin Du­a­to (Pho­to: End­points News)

Drug prices, and what the in­dus­try is go­ing to do about the grow­ing pres­sure to con­trol costs, was at the cen­ter of a dis­cus­sion End­points News host­ed Tues­day morn­ing at J.P. Mor­gan in San Fran­cis­co. We start­ed with J&J’s Joaquin Du­a­to, who promised to re­veal an­nu­al price in­creas­es to help demon­strate the com­pa­ny’s dis­ci­pline.

But the glob­al phar­ma gi­ant is not go­ing to break down the price hikes on a drug-by-drug ba­sis, he added in re­sponse to a ques­tion, so they can main­tain a com­pet­i­tive edge.

“It’s go­ing to be done on an ag­gre­gate lev­el,” Du­a­to told the crowd. Spe­cif­ic prices are “some­thing that we do not want to dis­close be­cause of the com­pet­i­tive im­pli­ca­tions. The same way that we are talk­ing about dis­counts and re­bates, we are go­ing to dis­close them at an ag­gre­gate lev­el, be­cause dis­clos­ing dis­counts and re­bates by chan­nel does have a com­pet­i­tive im­pli­ca­tion too.”

Richard Pops, Brent Saun­ders (Pho­to: End­points News)

Whether or not that will be enough to dis­pel a grow­ing na­tion­al con­tro­ver­sy won’t be known for some time. But Trump’s re­marks un­der­scored that it’s a new day in bio­phar­ma when it comes to drug prices. And Richard Pops, the CEO of Alk­er­mes, not­ed that change is com­ing af­ter Big Phar­ma got hooked on the crack co­caine of ex­ten­sive price hikes for years.

For me it’s so in­ter­est­ing be­cause un­bur­dened with any ex­pe­ri­ence of hav­ing run a phar­ma­ceu­ti­cal com­pa­ny I come to it al­most like a Mar­t­ian from Mars com­ing to say, “How does this whole thing work?” It’s so bizarre be­cause, I must ad­mit, I don’t think any of us re­al­ized how fre­quent­ly phar­ma­ceu­ti­cal com­pa­nies were in­deed rais­ing prices over the last decade or so. How ex­ten­sive the price in­creas­es were, and in the set­ting of an in­vestor con­fer­ence, you re­al­ize just what crack co­caine that is when you cou­ple unit growth of a launch­ing med­i­cine with se­mi-an­nu­al price in­creas­es. You just get ex­plo­sive earn­ings growth, which is ex­act­ly what the mar­ket wants.

For Saun­ders, the in­dus­try is head­ed in the right di­rec­tion, but peo­ple should pay more at­ten­tion to net rather than gross price hikes.

Ten days in­to the year, you’re right, a lot of com­pa­nies are fig­ur­ing out that they need to be more thought­ful and cau­tious about price in­creas­es, which is a good thing….The re­al num­ber is the net. I mean, we could talk about the gross all day, and we’re hap­py to de­bate that, but the net…is prob­a­bly some­where be­tween one and 4%, de­pend­ing on what their re­bate and dis­count lev­els are. You know, I think com­pa­nies are act­ing more re­spon­si­bly than ever, and I think that’s a good thing.

We’ll have the full pan­el dis­cus­sion for you next week here at End­points.

RWE chal­lenges for to­day's bio­phar­ma

The rapid development of technology — and the resulting avalanche of data — are catalysts for significant change in the biopharmaceutical industry. This translates into urgent pressures for today’s biopharma, including a need to quickly and affordably develop products with proven therapeutic efficacy and value. This urgency is expedited by the growth of value-based contracting, where access to reimbursement and profit depends on these abilities.

UP­DAT­ED: In a stun­ning turn­around, Bio­gen says that ad­u­canum­ab does work for Alzheimer's — but da­ta min­ing in­cites con­tro­ver­sy and ques­tions

Biogen has confounded the biotech world one more time.

In a stunning about-face, the company and its partners at Eisai say that a new analysis of a larger dataset on aducanumab has restored its faith in the drug as a game-changer for Alzheimer’s and, after talking it over with the FDA, they’ll now be filing for an approval of a drug that had been given up for dead.

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As shares suf­fer from a lin­ger­ing slump, a bruised Alk­er­mes slash­es 160 jobs in R&D re­struc­tur­ing

With its share price in a deep slump after suffering through a regulatory debacle over their depression drug ALKS 5461, Alkermes CEO Richard Pops is taking the ax to its R&D organization in a restructuring aimed at cutting costs ahead of its next attempt at a rollout in a tough field.

Richard Pops, Endpoints via Youtube

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Acor­da's Ron Co­hen brings the ax back out as new drug sales on­ly trick­le in while cash cow is led to the slaugh­ter

With its new drug earning meager sums and its one-time cash cow reduced to a bony shadow of its former self, Acorda Therapeutics today is rolling out a new restructuring aimed at slashing the staff and cutting costs to get through the hard times ahead.

The biotech is chopping a quarter of its staff today, carving back R&D as well as SG&A expenses. And CEO Ron Cohen is cutting deep.

Under the new austerity budget, Acorda’s R&D expenses for the full year 2019 are expected to be $55 – $60 million, reduced from $70 – $80 million. SG&A expenses for the full year 2019 are expected to be $185 – $190 million, reduced from $200 – $210 million. R&D expenses for the full year 2020 are expected to be $20 – $25 million and SG&A
expenses for the full year 2020 are expected to be $160 – $165 million.

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RAPT Ther­a­peu­tics re­turns to Wall Street to re­vive IPO bid

On May 24, FLX Bio, a small cancer and inflammation biotech with backing from GV, changed its name to RAPT Therapeutics and filed confidentially for an IPO. On July 5th, they filed to raise up to $86 million. On July 22, they announced the IPO with a $75 million goal.  And on August 1, they abruptly and without explanation called it all off.

Now, without explanation, they’re reviving the bid, filing again for a $75 million IPO, this time with a new bookrunner and a new drug candidate in the clinic. The terms will be the same: 5 million shares at $14-$16 per share. It would give them a diluted market value of $351 million.

EY vet set to re­place re­tir­ing Am­gen CFO Meline

Ahead of its third-quarter results next week, Amgen on Tuesday disclosed the planned retirement of David Meline, who has served as the company’s chief financial officer since 2014.

Meline will be replaced by Ernst & Young vet, Peter Griffith, as CFO come January 1, 2020 — but until then Griffith will serve as executive vice president, finance.

“Over the last 5 years at Amgen, Meline instituted many major changes that led to operational efficiencies and margin expansion while successfully returning cash to shareholders. Now that Amgen is on solid footing, it was a good time to step away,” Cowen’s Yaron Werber wrote in a note. “We do not anticipate any major changes to strategy or operations immediately due to this transition as Amgen is on solid footing.”

Eli Lil­ly’s USA, di­a­betes chief En­rique Con­ter­no is head­ing out af­ter 27 years, and he’s be­ing re­placed by a com­pa­ny in­sid­er

Close to 3 years after Eli Lilly CEO Dave Ricks added the title of president of the US operations to Enrique Conterno’s resume, which included his helmsmanship of the diabetes franchise, the Peruvian born exec is set to retire after a 27-year run at the pharma giant.

Lilly put out the news just as it was posting Q3 results, with a mix of upbeat and downbeat results in the latest set of numbers from Lilly.
Conterno — a grizzled, deeply experienced and sometimes gruff veteran of the pharma world — was a high-profile figure at Lilly, stepping up to expanded duties as the company was forced to deal with intense pricing pressure on the diabetes side of the business. He had replaced outgoing US president Alex Azar, who later popped up as head of Health and Human Services in the Trump administration.
As head of the diabetes unit, Conterno had to deal with an extraordinarily competitive field as payers demanded bigger discounts. Trulicity’s success helped generate new revenue for the company, but Q3’s miss on revenue had a lot to do with the need for discounting the drug ahead of Novo Nordisk’s rival therapy, Rybelsus, which was priced on the wholesale level at an almost identical rate.

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Vas Narasimhan. Getty Images

UP­DAT­ED: Failed PhI­II fe­vip­iprant tri­als pour more cold wa­ter on No­var­tis' block­buster R&D en­gine — and briefly spread the chill to a high-pro­file biotech

Back in July, during an investor call where Novartis execs ran through an upbeat assessment of their Q2 performance, CEO Vas Narasimhan and development chief John Tsai were pressed to predict which of the two looming Phase III readouts — involving cardio drug Entresto and asthma therapy fevipiprant, respectively — had a higher likelihood of success. Tsai gave the PARAGON-HF study with Entresto minimally better odds, but Narasimhan emphasized that their strategy of giving fevipiprant to more severe patients gave them confidence.

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No­var­tis hands off $80M in cash to part­ner up with a top biotech play­er in the fi­bro­sis sec­tor

Never underestimate the power of a good showing at a scientific conference.
In a presentation late last year, the researchers at Pliant Therapeutics launched a series of discussions about the preclinical data they were pulling together around their work on their small-molecule integrin inhibitor aimed at transforming growth factor beta, or TGF-β, a key pathway involved in fibrosis.
And they got some serious attention for the work.
“We got interest from pharma partners and at the end Novartis basically made it,” says Pliant CEO Bernard Coulie.